Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 32, Problem 1QCMC
To determine
The impact of increasing real interest rate when others are kept constant.
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Students have asked these similar questions
The value of net exports equals the value of
A. national saving – domestic investment.
B. national saving – net capital outflow.
C. public saving.
D. national saving.
Where Yis GDP, Cis consumption, /is investment, Gis government spending, and there is no international trade, national saving equals:
Multiple Choice
Y-C-G
C++G.
Y-C-
Y+C+G.
4. Assume no government and no international trade in a country. Show that measured
savings is identical to measured investment.
Chapter 32 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Multiple choice question In a small economy the difference between saving and investment determines: a. real exchange rate.b. net exports and net capital outflow.c. taxes.d. government expenditures.arrow_forwardUse EXCEL and show formula/work pleasearrow_forwardIn a closed economy, if Y and T remained the same, but G rose, and C fell but by less than the rise in G, what would happen to public and national saving? a. public and national saving would rise b. public saving would fall and national saving would rise c. public saving would rise and national saving would fall d. public and national saving would fallarrow_forward
- Foreign Direct Investment results in the following benefits: Select one: a. State of the art technologies b. Increase the economy's stock of сapital c. Increase the economy's stock of capital, Higher productivity, and State of the art technologies d. None of the answers are correct e. Higher productivityarrow_forwardIf the world real interest rate falls, then a country that is an international lender Select one: A. changes from being a net foreign lender to a net foreign borrower. B. does not change the amount of its lending. C. decreases the amount of its lending. D. increases the amount of its lending. E. none of the abovearrow_forwardWhich of the following is most restricted to flow across national boundaries? A. People. B. Capital flows. O C. Financial and Portfolio Investment. D. Foreign Direct Investment.arrow_forward
- True of False and explain: Investment is critical to economic development. Developing countries have immature domestic financial sectors, therefore they should pursue trade policies designed to produced trade surpluses.arrow_forwardIf a country is running a government budget surplus, why is (T - G) on the left side of the saving-investment identity?arrow_forwardAn increase in increase in leads to a higher steady-state level of output, and an leads to a lower steady-state level of output. the saving rate: productivity None of these answers is correct. O productivity; the initial capital stock O the saving rate; the depreciation ratearrow_forward
- Which is an example of foreign portfolio investment? a. Australian tourists going on a safari in Kenya. b. Indonesian merchants selling coffee beans to Japanese importers. c. US consumers increasing their demand for German automobiles. d. Brazilian banks using pesos to buy stock in Mexican corporations.arrow_forwardQuestion 1:In Ghana, the capital share of GDP is about 40 percent, the average growth in output is about2 percent per year, the depreciation rate is about 3 percent per year, and the capital–output ratiois about 1.5. Suppose that the production function is Cobb–Douglas and that Ghana has beenin a steady state.a. What must the saving rate be in the initial steady state? [Hint: Use the steady-staterelationship, sy = (δ + n + g)k.]b. What is the marginal product of capital in the initial steady state?c. Suppose that public policy alters the saving rate so that the economy reaches the GoldenRule level of capital. What will the marginal product of capital be at the Golden Rule steadystate? Compare the marginal product at the Golden Rule steady state to the marginal productin the initial steady state. Explain.d. What will the capital–output ratio be at the Golden Rule steady state? (Hint: For the Cobb–Douglas production function, the capital–output ratio is related to the marginal product…arrow_forwardWhich of the following would be U.S. foreign direct investment? A. A U.S. canning factory opens a plant in Ecuador. B. A Bolivian bank buys U.S. corporate bonds. C. A Polish company opens a shipbuilding plant in the United States. D. A U.S. bank buys Bolivian corporate bonds.arrow_forward
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