M Max Croce
Connection to Our Model
t of L
Essay 1: Macroland has just experienced a substantial increase in the price of equipment goods.
(a) Using an appropriate graph, show what happens to the demand of capital (3pts) and explain why. (2pts)
(b)Assuming that there is no change in the long run m
HW #5 (Solutions)
Topic: Current Account and B.o.P.
1. A positive Current Account (CA) for Macroland:
A. Depresses Macrolands domestic investment-keeping domestic savings
B. May indicate that Macroland is losing international investors confidence