What are the overall effects on saving and investment

Reference no: EM13225030

The country of Leverett is a small open economy. Suddenly, a change in world fashions makes exports of Leverett unpopular.

a. What happens to saving, investment, net exports, the interest rate, and the exchange rate?
b. The citizens of Leverett like to travel abroad. How will this change in the exchange rate affect them?
c. The fiscal policy makers of Leverett want to adjust taxes to maintain the exchange rate at its previous level. What should they do? If they do this, what are the overall effects on saving, investment, net exports, and the interest rate?

Reference no: EM13225030

Questions Cloud

Explain why is it important that cooling water in distilling : why is it important that cooling water in distilling apparatus enters conceder jacket at at the lower end and exit at the upper end, and not vice versa?

Calculate the labor force participation rate : a. Identify the number of people employed, the number of people unemployed, and the number of people in the labor force. b. Calculate the labor force participation rate, the employment rate, and the labor force unemployment rate

Explain dangerous to heat a liquid in a distilling : why is it dangerous to heat a liquid in a distilling apparatus that is closed tightly at every joint and has no vent to the atmosphere?

Determine calcium sulfide and iron bromide : Write the net ionic equation for this reac- tion occuring in water: Calcium sulfide and iron(II) bromide are mixed to form iron(II) sulfide and calcium bromide.

What are the overall effects on saving and investment : The fiscal policy makers of Leverett want to adjust taxes to maintain the exchange rate at its previous level. What should they do If they do this, what are the overall effects on saving, investment, net exports, and the interest rate

What happens if the fed cuts the reserve requirement : suppose the banking system has $1000 million worth of checkable deposits.The reserve requirement is 10%. A-What ultimately happens to the money supply if the fed cuts the reserve requirement to 8%

Define what are the equilibrium concentrations : At 2000 degrees celcius the equiblibrium constant for the reaction 2NO to N2 and O2 is Kc = 2.4 x 103. If the initial concentration of NO is 0.200M, what are the equilibrium concentrations of NO, N2, and O?x?

State sketch a titration curve for the titration : Sketch a titration curve for the titration of 100mL of 1.25x10^-2 M ascorbic acid with 1.00x10^-2 M NaOH, given that Ka= 8.0x 10^-5 and Ka2= 1.6x10^-12. How many equivalence points should the curve have and what color indicator(s) could be used?

By how much is your bank now able to expand the loans : 2-you find $1000 worth of old coins while you are mountain climbing in Colorado.You promptly deposit the coins in your Checking account. if the reserve requirement is 10%, how much money did you ultimately create

User Account

All Pages