Find small open economy with perfect capital mobility


Which of the following is true for a small open economy with perfect capital mobility but false for a large open economy with perfect capital mobility?

a. Net exports are unlikely to be close to zero.
b. The domestic real interest rate is equal to the world real interest rate.
c. Changes in desired investment result in changes in the trade balance.
d. Changes in desired investment result in changes in actual investment.
e. All of the above.
f. None of the above.

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Find small open economy with perfect capital mobility
Reference No:- TGS054795

Expected delivery within 24 Hours