Explain theoretically long-run effects on interest rates

Assignment Help International Economics
Reference no: EM13237030

Although the world financial crisis of 2008-2009 began in the US subprime mortgage market, it quickly spread around the world. Ironically, foreign assets became viewed as riskier than US assets. As a result, investors around the world viewed the US as a "safe haven" and increased their purchases of US assets. Use the appropriate graphs for a large open economy to illustrate and explain the theoretically long-run effects on each of the following: the US real interest rate, national savings, investment, net capital outflow, the US real exchange rate, and the US net exports.

Reference no: EM13237030

Questions Cloud

How will the policy steps affect the nations employment : Survey the monetary policies adopted by the Federal Reserve Board since the countries financial crisis erupted in 2008. How will these policy steps affect the nation's employment, inflation, real interest rate and real exchange rate over the long ..
Evaluate company qs current attitude social responsibility : Recommend three actions that Company Q could take to improve the company's attitude toward social responsibility.
What is final temperature when equilibrium is established : A 1kg of ice at -30° C is added to 10 kg of steam at 500°C. answer the following questions, What is the final temperature when the equilibrium is established
Explain what is dgo at the temperature in kj : A given reaction has an equilibrium constant at 920 K of 2.73 x 1011. What is DGo at this temperature in kJ
Explain theoretically long-run effects on interest rates : As a result, investors around the world viewed the US as a "safe haven" and increased their purchases of US assets. Use the appropriate graphs for a large open economy to illustrate and explain the theoretically long-run effects
Compute the equilibrium constant for the reaction : Write a balanced net ionic equation to show why the solubility of FeCO3(s) increases in the presence of cyanide ions and calculate the equilibrium constant for this reaction.
Explain dho and dso hardly change with temperature : Assuming that DHo and DSo hardly change with temperature, determine the temperature in K at which the spontaneity of this reaction changes.
Explain what the long-run effects would be on real gdp : Although most of the changes would not take place until later, assume for the purpose of this problem that Social Security benefits were cut today by $100billion per year. explain what the long-run effects would be on real GDP
Explain the maximum amount of magnesium ion remaining : Solid ammonium fluoride is slowly added to 125 mL of a magnesium sulfate solution until the concentration of fluoride ion is 0.0476 M. The maximum amount of magnesium ion remaining in solution is

Reviews

Write a Review

International Economics Questions & Answers

  What might happen if the us outlawed labor unions

In Cozmetal labor unions are illegal, and anyone caught trying to organize the workforce of any commercial enterprise is flogged to death in the public square with a cat-o-nine-tails adorned with darning needles.

  Why ethanol producers have large import tariff on ethanol

Brazilian Ethanol Producers (who make ethanol from sugarcane) have lower production costs than U.S. producers. Indeed, even though it costs 16 cents per gallon to transport ethanol from Brazil to the U.S

  What is the slope of japans short-run phillips curve

Due to historical differences, countries often differ in how quickly a change in actual inflation is incorporated into a change in expected inflation. In a country such as Japan, which has had very little inflation in recent memory

  Diff erence between absolute and relative ppp

What is the diff erence between Absolute and Relative PPP? Which theory requires fewer assumptions and give two reasons why Absolute PPP might not hold in the short-run.

  How illegal immigration to us has approximately doubled

"Real wages for Mexican industrial workers declined 13.5% since 1994." "Over 500,000 U.S. employees have lost their jobs after their companies moved to Mexico." "Mexico has lost over 1 million farming jobs."

  Explain wto and gatt

Which of the following situations will arise in the domestic market following the removal of an import quota? a. imports increase, domestic production increases, prices increase b. imports increase, domestic production decreases, prices decrease c. i..

  Question based on keynesian theory

Based on the Keynesian theory in does it matter what the money is  spent on?  discuss and explain the amount of stimulative  effect we can expect, depending on how the stimulus is financed.

  How the unemployment rises in the us defense industry

Suppose Congress cuts spending for the military, and then unemployment rises in the U.S. defense industry. Is there causation in this situation, or are we observing an association between events

  What will determine that economy is slowly recovering

In the period 2000-2003, the RGDP (real GDP adjusted for inflation) growth rate in the US averaged 2.39% per year, while inflation rates remained at around 2.53% per year. In the latter half of the 1970's, by contrast, inflation rates accelerated ..

  What wil laffect relative values of dollar and french fran

Explain how each of the following will affect the relative values of the dollar and the French franc: -Income growth higher in the United States than in France. -Inflation higher in France than in the United States. -A real interest rate higher in..

  Comparing beta of other companies

Write a very brief introduction indicating why you chose this particular firm. Give a brief summary of the firm's history and type of business and industry it is in. Examine the firm's operations and forecast for the next 3 to 5

  Why might higher require reserve ratio decrease bank profits

China's central bank will raise its reserve ration requirement by a percentage point to a record 17.5 percent by June 25, stepping up a battle to contain lending growth. The increase will freeze up about 422 billion yuan of funds, equivalent to 9..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd