1.In the context of the Solow model, explain briefly how the current level of capital k affects the change in the level of capital from today to tomorrow (i.e., if k were higher, in what ways would that affect ∆k). Be sure to explain all of the effects.
2.Suppose domestic inflation is positive (π > 0), foreign inflation is zero (π ∗ = 0), and the central bank is operating a fixed exchange rate (%∆e = 0). What, if anything, will happen to the real exchange rate ? Be sure to explain in words what is going on.
Recently Asked Questions
- The patient recovery time from a surgical procedure is normally distributed with a mean of 5.3 days and population standard deviation of 2.1 days. How do I
- 1. When the price level in Australia drops, Australian net exports will _______, because of the ________. decrease; interest rate effect
- The initial step in the industrial production of nitric acid involves the following balanced chemical reaction: 4 NH3 ( g ) + 5 O2 ( g ) --> 4 NO ( g