The impact of international capital flowsNote:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. 8. The impact of international capital flowsSuppose that the following graph depicts the market for funds in the US credit market. The blue line, labeled D, represents the demand for funds. Thesupply curve labeled s₁ represents the supply curve of funds from American sources, with no foreign funds in the market. The supply curve labeled$2 represents the supply curve of funds from both American and foreign sources.Long-Term Interest Rate109DAmount of Funds$₁$₂(? Without influence from foreign sources of funds, the long-term equilibrium interest rate isterm equilibrium interest rate is%.The following graph depicts the market for business investments in the United States. The green line represents the relationship between the long-term interest rate and the amount of business investments.Use the black point (plus symbol) to plot the point that represents the combination of business investment and long-term interest rate that comesabout when there is no influence from foreign funds. Then, use the grey point (star symbol) to plot the point that represents the combination ofbusiness investment and long-term interest rate when the influence from foreign funds is accounted for.(?)Long-Term Interest Rate109853210 #050100150 200 250 300 350 400 450US Business Investment (Billions)500%. With influence from foreign funds, the long-+Without foreign fundsWith foreign funds

Let's first analyze the first graph that depicts the market for funds in the US credit…

Answered: Without influence from foreign sources…

Without influence from foreign sources of funds, the long-term equilibrium interest rate is term equilibrium interest rate is %. %. With influence from foreign funds, the long-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: (T/F) Modern commerce and media allowed economic and cultural globalization to thrive more. False…

A: Globalization is a social, cultural, political, and legal phenomenon that has an impact on people's…

Q: From the perspective of an international business, what are the most important criteria you think…

A: The government decides on a fixed exchange rate for a nation's money, and it is frequently driven by…

Q: Question 30 The major cost of large capital inflows to a country is O ikely high amount of interest…

A: When talking about capital inflows, it refers to the movement of funds from the rest of the world to…

Q: Brazil Poland Wine 10 20 Machines 10 10 The accompanying table gives maximum-output alternatives for…

A: Opportunity cost is the next best alternative.Opportunity cost shows the forgone units of one good…

Q: What are some differences between the gift economy and the exchange economy?

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you as per…

Q: onsidering the rapidly growing presence of China in Latin America economy list why this can be a…

A: In Latin American countries, the growth of the middle class was being observed during the last two…

Q: None

A: To find the deadweight loss associated with this monopoly, we first need to determine the…

Q: Describe the factors for international firms must consider when doing business in Asia. Given…

A: The goal of international businesses entering the international market is to attract more consumers…

Q: (a) Definite Purchasing Power Parity with quoted example. Please give explanation in details with…

A: This can be defined as a concept that shows the total production of products and services in an…

Q: What challenges can Wal-Mart expect with its international expansion efforts?

A: We show that Going abroad means that Walmart will hàve to deal with one and dèvelop a possibly…

Q: Your boss is very interested in the business opportunities in country Russia. He is about to meet a…

A: The objective of this question is to provide a brief overview of Russia's economic, political, and…

Q: Countries such as the China that have large populations tend to have a) relatively greater capital…

A: Meaning of Gross Domestic Product (GDP): The term gross domestic product refers to the situation…

Q: Why we should agree in 6-year term of national positions rather than 4-year term of national…

A: A 4-year term of national position refers to the duration of office for elected officials in key…

Q: What are the Issues of concern to the local government and people of Guatemala with regards to…

A: Guatemala has Central America's largest economy. Remittances from the United States, in particular,…

Q: aracterize Vietnam's economic development before Doi Moi reforms, str

A: Reforms can be described as the deliberate and systematic changes or modifications done with the…

Q: What was the nature of the early postwar international system and what role did American leadership…

A: The early postwar international system was characterized by a number of key features that were…

Q: Please no written by hand solutions complete a STEP (social, technological, economic, political)…

A: The technique of analyzing how people, businesses, and entire economies behave economically is known…

Q: dentify what you consider to be the political risks facing companies thinking of investing in your…

A: Nation risk refers to the level of uncertainty associated with investing in a given country, and…

Q: International Economics Was Chile under Pinochet a success story? Should Chile try to join a…

A: An arrangement established by multiple parties to facilitate the unrestricted flow of products and…

Q: Advocates for globalization believe that globalization promotes? Multiple Choice Environmental…

A: Globalization refers to the process of interaction and integration among people, companies, and…

Q: 3. A measure of the potential impact of a country on the world and within its region is calle Legal…

A: A country refers to the piece of land on earth that is owned and ruled by a specific government…

Q: Identify different political views on FDI based on an understanding of its benefits and costs to…

A: FDI stands for Foreign Direct Investment, which refers to the investment made by a foreign entity in…

Q: When a country has a net financial capital flow, its_ O A) capital inflows are greater than capital…

A: For a given period, net cash flow is the difference between money flowing in and money going out of…

Q: From a globophobic/globophobe view, Is international capital ruling the domestic economy?

A: The globophobic are those who have fear from globalization.

Q: Nation-to-nation investment should help both nations involved. O True O False

A: Investment is the process of adding to the stock of capital assets with the expectation of getting a…

Q: What can a multi-national enterprise do to minimize its exposure to political risks in its host…

A: A multinational enterprise (MNE) and at times likewise called multinational company (MNC), simply…

Q: Foreign direct investment tends to be inexpensive, but it gives companies very little control of…

A: A acquisition of a stake in a local business by a corporation or individual based in another country…

Q: Under system of fixed exchange rates, which of the following policies could the U.S. government use…

A: In a scenario where all goods are traded and markets are fully efficient, the equilibrium exchange…

Q: how do the legal–political, economic, and cultural environmental differences within a country affect…

A: Liberalization agreements among many countries characterize International Business. There are…

Q: How might Nederlander benefit from expanding its business throughout the European Union (outside the…

A: Meaning of Trade: The term trade refers to the situation under which the products and goods are…

Q: Discuss your thoughts on internationalization versus born-global. Do you believe a SME should…

A: It has been guaranteed that Born Globals are incongruent with the Uppsala model, which depends on…

Q: Foreign Direct Investment results in the following benefits: Select one: a. State of the art…

A: Foreign direct investment is investment made by an individual or a company of a nation in the…

Q: 5. The empirical fit of the production model: The table below reports per capita GDP and capital per…

A: The Gross Domestic Product is a monetary indicator that reflects the market value of all services…

Q: Explain how the oil producing countries can enforce an agreement between them to maintain a commonly…

A: Enforcing an agreement among oil-producing countries to maintain a commonly desired level of…

Q: Some argue that globalization benefits citizens of rich countries. Others argue that globalization…

A: Globalization is a word used to describe how nations, people, and companies are becoming…

Q: The World Bank was originally the International Bank of Reconstruction and Development that was…

A: The World Bank is the international authority that provide financial facilities to the countries…

Q: A4) Consider the international parities and provide a forecast for the pair of GBP/EUR in coming 3…

Q: True/False A pro-savings policy by the US would likely reduce the US trade deficit.

A: Trade deficit: It refers to the situation in which the country import exceeds the country’s export.…

Q: 46. Ethical relativism is one of the primary benefits of Globalization.a. Trueb. False

A: b. False Explanation:Approach to solving the question: Globalization may or may not directly lead to…

Q: Give 3 reasons for the emergence of International business.

A: International business refers to the situation when a firm is selling goods and services to the…

Q: magine that Sony is having difficulty selling Playstations in Greece because of differences in local…

A: Foreign direct investment (FDI) is a form of cross-border funding made by using a company or…

Question

The impact of international capital flows

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer.

Take care of plagiarism.

Answer completely.

You will get up vote for sure.

8. The impact of international capital flows
Suppose that the following graph depicts the market for funds in the US credit market. The blue line, labeled D, represents the demand for funds. The
supply curve labeled s₁ represents the supply curve of funds from American sources, with no foreign funds in the market. The supply curve labeled
$2 represents the supply curve of funds from both American and foreign sources.
Long-Term Interest Rate
10
9
D
Amount of Funds
$₁
$₂
(?

Without influence from foreign sources of funds, the long-term equilibrium interest rate is
term equilibrium interest rate is
%.
The following graph depicts the market for business investments in the United States. The green line represents the relationship between the long-
term interest rate and the amount of business investments.
Use the black point (plus symbol) to plot the point that represents the combination of business investment and long-term interest rate that comes
about when there is no influence from foreign funds. Then, use the grey point (star symbol) to plot the point that represents the combination of
business investment and long-term interest rate when the influence from foreign funds is accounted for.
(?)
Long-Term Interest Rate
10
9
8
5
3
2
1
0 #
0
50
100
150 200 250 300 350 400 450
US Business Investment (Billions)
500
%. With influence from foreign funds, the long-
+
Without foreign funds
With foreign funds

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Step-1

VIEW

Step 2: Step-2

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Without globalising to compete internationally the firms need to concentrate on a. Standardization. b. Market shares. c. Financial performance of operations. d. Quality improvement.
Explain how government incentives can have an impact on multinational capital budgeting
A rise in the real exchange rate is called (a) a real depreciation. (b) a real bargain. (c) a real devaluation. (d) a real appreciation.
The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called (a) purchasing power parity. (b) equity. (c) efficiency. (d) the tragedy of the commons.
Describe the major risks ( Economic Risk & Political Risk) of international diversification.
When an American purchases a German good or invests in Germany, Euros currency is supplied and U.S. dollars are demanded. True False
Low Intra-GCC trade is a. An institutional challenge for GCC countries b. An economical challenge for GCC countries c. An economical rationale for GCC integration. d. An institutional similarity of GCC countries
Your boss is very interested in the business opportunities in country Russia. He is about to meet a potential partner next month. Prepare some important info of country russia and present to him. Note: He is extremely busy so keep the presentation short in less than 1 5 mins and spare 5 to 10 mins for Q&A. - Main info of the country (GDP, Language, who is the president, important industries, currency exchange...) - Business Culture (what should we do what we shouldn't do. . . ? - Pick one company of Country Russia and tell us about its mission, vision and values. What do you think about them
43. The process of sharing goods, services, knowledge, and cultures across national borders is referred to asa. multinationalism.b. relativism.c. hypernorms.d. globalization.
GE Appliance Park in Louisville has been sold to Haier, a Chinese company. What form of Foreign Direct Investment is it for Haier?
International Business Why do firms conduct international business? Require about 200 words. DO NOT COPY AND PASTE. please be precise to the question and answer in OWN WORDS.
Nations can increase their productivity by specializing and trading with countries that are more efficient at producing certain goods or services. True False