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

Market demand and market supply for fish, Consider a market for fish whose ...

Consider a market for fish whose market demand and market supply for fish is specified as Qd = 300 - 2.5 P and Qs = - 20 + 1.5 P respectively. The equilibrium price and quantity is

Formulate null and alternative hypotheses to test analysts, Many investors ...

Many investors and financial analysts believe the Dow Jones Industrial Average (DJIA) provides a good barometer of the overall stock market. On January 31, 2006, 9 of the 30 stocks

Demand, Demand: Demand is quantity of a good buyer who wishes to purcha...

Demand: Demand is quantity of a good buyer who wishes to purchase at each conceivable price. The law of demand explains us that if the price of certain commodity increases,

NATIONAL INCOME VARIATION, give and explain the different causes of nationa...

give and explain the different causes of national income variation

Ppcs, how to get full marks in a drawing of ppc diagrams

how to get full marks in a drawing of ppc diagrams

Equilibrium in both the goods and in the money market, Equilibrium in both ...

Equilibrium in both the goods and in the money market  If both the goods- and the money markets are to be in equilibrium... ...if P increases, Y must fal

Annual income from an apartment, The annual income from an apartment comple...

The annual income from an apartment complex is $20,664. The annual expense is estimated to be $3,414. The apartment complex could be sold for $146,499 at the end of 10 years. If yo

As-ad model with inflation, Q. AS-AD model with inflation? When we have...

Q. AS-AD model with inflation? When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by Π M whereas it is Π W that appli

Wage rate increases, A person chooses between leisure and consumption. All ...

A person chooses between leisure and consumption. All of their consumption comes from current income. The utility derived from any combination of leisure and consumption is given b

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