Exhibit: Saving and Investment in a Small Open Economy

question 25

Multiple Choice

Exhibit: Saving and Investment in a Small Open Economy

 
Reference: Ref 5-1
(Exhibit: Saving and Investment in a Small Open Economy) In a small open economy, if the world interest rate is r ,
Then the economy has:

• A)a trade surplus.
• B)balanced trade.
• C)a trade deficit.
• D)negative capital outflows.

Compare effective rates of interest of different compounding intervals to identify the most beneficial investment option.

Calculate the present value of ordinary annuities and annuities due.

Understand the concepts of demand-pull and cost-push inflation.

Compare and contrast the effects of anticipated vs unanticipated inflation.