Comment on the desirability of the measures

Reference no: EM132196974

Question: The governor of Malia suggested limiting imports as a policy measure to restore economic stability in the country.

a. Suggest five possible measures the government can undertake to limit imports.

b. Assuming perfect capital mobility, use the classical model of a small open economy, to show and explain how in the long-run the measures are predicted to affect Malia's savings, investment, trade balance, the interest rate and the exchange rate. Comment on the desirability of the measures.

Reference no: EM132196974

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