Small open economy-starting from position of balanced trade

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Answer True, False or Certainty. Explain your Answer

a) In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade deficit and negative net capital outflow.

b) The level of capital that minimizes the steady-state consumption is called the Golden Rule level.

c) In the Solow growth model of an economy with population growth but no technological change, if population grows at rate n, then total capital grows at rate n and total output grows at rate n + sigma .

Reference no: EM13837321

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