What do you mean by capital flows, Macroeconomics

Assignment Help:

Q. What do you mean by Capital Flows?

With free capital flows, this is a very unreasonable assumption. If we domestic interest rate increase against the foreign interest rates, capital will flow into our country that would drive down the domestic interest rate again. 

Most reasonable models in that domestic interest rate is affected by foreign interest rates are more complicated. To understand such models, you should first understand models where this complication doesn't arise. Additionally predictions from models where domestic interest rate isn't affected by foreign interest rates are fairly similar to more realistic models which allows for capital flows.


Related Discussions:- What do you mean by capital flows

Describe an algorithm which gives initial amount , This problem involves th...

This problem involves the question of computing change for a given coin system. A coin system is defined to be a sequence of coin values v1 (a) Let c ≥ 2 be an integer constant

Financing of fiscal deficit, Financing of Fiscal Deficit: Since the siz...

Financing of Fiscal Deficit: Since the size of balanced budget of the multiplier is small, it is not for all time possible to get the needed demand expansion by raising the exp

Resulting market distortion, Consider a market for fish whose market demand...

Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively. The government decides to impose a p

Production function and growth, Q. Production function and Growth? From...

Q. Production function and Growth? From the simple production function Y = f(L, K), we can classify three sources of growth:  An increase in L. An increase in K.

Advantages might a socialist, What advantages might a socialist system have...

What advantages might a socialist system have in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January, 2010?

Public sector, Are there any current subsidy or welfare issues that are bei...

Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or in municipalities

Explain initial actual markup, George has been selling 5,000 T-shirts per m...

George has been selling 5,000 T-shirts per month for $8.50. When he increased the price to $9.50 he sold only 4,000 T-shirts. What is the demand elasticity? If his marginal cost is

Consumers become better educated about the products, How can consumers beco...

How can consumers become better educated about the products they are considering for purchase? To what extent do you personally go to acquire the best information available?

What do you mean by wage inflation, Q. What do you mean by Wage inflation? ...

Q. What do you mean by Wage inflation? We will develop the Keynesian model removing the assumption of fixed nominal wages. We state wage inflation p w as the percentage averag

Demand analysis, how the demand of pizzas in pizza hut affecting the market...

how the demand of pizzas in pizza hut affecting the market of fast food

Write Your Message!

Captcha
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