Country A is one of the largest and open economy, with a real interest rate of 3.27%. GDP growth rate of 2.2%. Current account deficit. Inflation of 1.81%. Country B is a large and open economy, with a real interest rate of 1.65%. GDP growth rate of 2.16%. Current account deficit. Inflation of 1.61%. Country C is a small and open economy with a real interest rate of 5.15%. GDP growth rate of 0.73%. Current account surplus. Inflation of 0.56%. What would the intertemporal model predict about capital flows and the current account balances of the three countries.

Country A is one of the largest and open economy, with a real interest rate of 3.27%. GDP growth rate of 2.2%. Current account deficit. Inflation of 1.81%. Country B is a large and open economy, with a real interest rate of 1.65%. GDP growth rate of 2.16%. Current account deficit. Inflation of 1.61%. Country C is a small and open economy with a real interest rate of 5.15%. GDP growth rate of 0.73%. Current account surplus. Inflation of 0.56%. What would the intertemporal model predict about capital flows and the current account balances of the three countries.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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