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Unformatted text preview: 5. Would cause net exports to rise for Ontario and for the other provinces. 6. Dollar depreciates and net exports rise. 7. The supply of loanable funds shifts out => NCO up => exchange rate down => NX up. 8. a. demand up. b. exchange rate up. c. unchanged. 9. NX up at any given real exchange rate => the demand for dollars shifts up => higher real exchange rate, but no change in net exports. Subsidy will not reduce the trade deficit. 10. NCO rises => value of the dollar falls and net exports rises. 11. a. large (but dont worry if you cant do it. We do not consider elasticity questions). b. small (but dont worry if you cant do it. We do not consider elasticity questions). 12. a. NCO down. b. private saving down, domestic investment up. c. domestic investment up => increased capital stock....
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- Winter '08