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Unformatted text preview: the world real interest rate the world quantity of saving and investment saving and investment in the United States the current account of the United States saving and investment in the rest of the world the current account of the rest of the world d) Does this change cause a capital inow into or a capital outow from the United States? Explain. . 2. Compare and contrast between purchasing power parity and interest rate parity. It may be easier to explain with examples. 3. What do you understand by nominal anchor? Why is it useful? 4. (Bonus Question: open ended) In the NFL, when a particular player is not playing well, say the quarterback, then the coach has to decide whether to continue with the player. Please provide 2 or 3 economic principles the coach can use in making the decision. (Remember, economic does not necessarily mean nancial). 1...
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- Fall '07