In a small open economy, suppose a tax reform increases the incentive forbusinesses to build new factories. Predict the effect of the event using themodel of small open economy:The net exports [ Select ]v. The real exchange rate[ Select ]. The nominal exchange rate[ Select ]*Note: an increase in exchange rate indicates appreciation.

An open economy is the one that makes economic transaction with other countries to import goods that…

Answered: In a small open economy, suppose a tax…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following open economy. Real GDP Consumption Government Expenditures Investment Exports Taxes Transfers 1,000 800 115 280 22 195 79 What is net foreign investment (NFI)? Round to two decimal places, enter the negative sign if appropriate, and do not enter a currency symbol. If your answer is $1.125, enter 1.13.
According to a survey ("Big MacCurrencies," The Economist, April 17th 1993), in 1993, the average price of a Big Mac in the U.S. was $2.28. In Japan, Big Mac fans had to fork out ¥391 for this feast. What was the PPP implied exchange rate between the $ and the ¥?
We saw in class that PPP conversion factors are different from market exchange rates because they are based on the actual purchasing powers of currencies. The table below shows the GDP of different countries in their local currency along with their GDP at the market exchange rate, population, and the PPP conversion factor. country GDP in 2017 GDP (US$s, at market ex.) PPP factor роpulation Japan 544¥ trillion $4.86 trillion 105 ¥/$ 127.5 million India 1717 trillion $2.65 trillion 20 7/$ 1339 million |Мexico 22 trillion pesos $1.16 trillion 11 pesos/$ 129 million Which country has the higher GDP per capita measured in purchasing power, India or Mexico? Mexico's average income is more than double India's India's average income is more than double Mexico's Mexico and India have similar average incomes not enough information is provided
i need the answer quickly
In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate? (explain the answer) a. 4/2.7 loaves of British bread per loaf of French bread b. 3.6/3 loaves of British bread per loaf of French bread c. 3/3.6 loaves of British bread per loaf of French bread d. 2.7/4 loaves of British bread per loaf of French bread

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