Sub : FinancePls answer very fast.I ll upvote. Thank You What will happen to the trade balance and the real exchange rate of a small open economy when government purchases incras during a war? Does your answer depend on whether this is a local war or a world war?a. Make the appropriate changes to the graph below to reflect an increase in government purchases for national defense.Real Exchange Rate ()201816141210202World Interest Rate02468 10 12Net Exports (NX)National Saving less Domestic Investment (S-1)Net Exports, or NX(e)14 16 18 20b. For a local war, the increase in government purchases woud causechange in net exports would push the trade balance towardto decrease, and the resultingc. For a world-wide war, world defense spending increases would cause a decline in world saving, which would result in anThe impact on the domestic trade balance depends on the sensitivity ofincrease into changes in the world interest rate.

The cost of domestic products and services in terms of imports is known as the real exchange rate…

What will happen to the trade balance and the real exchange rate of a small open economy when government purchases inc as during a war? Does your answer depend on whether this is a local war or a world war? a. Make the appropriate changes to the graph below to reflect an increase in government purchases for national defense. Real Exchange Rate () 20 18 16 14 12 10 6 World Interest Rate 6 10 12 Net Exports (NX) National Saving less Domestic Investment (S-1) Net Exports, or NX(x) 14 16 18 20 b. For a local war, the increase in government purchases woud cause change in net exports would push the trade balance toward to decrease, and the resulting c. For a world-wide war, world defense spending increases would cause a decline in world saving, which would result in an The impact on the domestic trade balance depends on the sensitivity of increase in to changes in the world interest rate.

What will happen to the trade balance and the real exchange rate of a small open economy when government purchases inc as during a war? Does your answer depend on whether this is a local war or a world war? a. Make the appropriate changes to the graph below to reflect an increase in government purchases for national defense. Real Exchange Rate () 20 18 16 14 12 10 6 World Interest Rate 6 10 12 Net Exports (NX) National Saving less Domestic Investment (S-1) Net Exports, or NX(x) 14 16 18 20 b. For a local war, the increase in government purchases woud cause change in net exports would push the trade balance toward to decrease, and the resulting c. For a world-wide war, world defense spending increases would cause a decline in world saving, which would result in an The impact on the domestic trade balance depends on the sensitivity of increase in to changes in the world interest rate.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 44P: Imagine that the U.S. economy finds itself in the following situation: a government budget deficit...

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