If desired saving increases in a small open economy, net exports (net capital outflow) rise. What happens to net exports if desired saving rises in most of the world's economies at the same time?
What will be an ideal response?
An increase in global saving reduces the world real interest rate, which lowers saving and raises investment in all open economies. This counteracts the initial increase in saving. In some economies, where the initial increase in saving is relatively small, the effect of the reduced interest rate will dominate, so that net exports (net capital outflow) will decline.
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Which of the following statements regarding the long run for a profit-maximizing monopolistically competitive firm is FALSE?
A) The firm is making zero economic profit. B) The firm produces the quantity of output for which marginal revenue equals marginal cost. C) The average total cost equals the price. D) The firm produces the quantity at which the marginal revenue curve intersects the demand curve.
Without product differentiation, it would be very difficult for firms to develop brand loyalty
Indicate whether the statement is true or false
Approximately how many different national currencies exist in the world today?
a. more than 150 b. more than 5,000 c. 12 d. 535
Which statement is true?
A. The federal budget deficit reached a peak in 1992 and has been declining since then. B. The federal budget deficit in fiscal year 1997 was at a record high. C. Because we ran federal budget surpluses since 1998, the national debt is falling. D. The federal government ran budget surpluses from 1998 to 2001, but returned to deficits since 2002.