Thursday, December 8, 2011

Need help on a question related to current account balance, investment, national saving n more?

A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. Analyze the effects on the country's current acc balance, national saving, and investment, and on domestic and world real interest rates. Assume that, before the capital controls were imposed, the large country was running a capital account surplus.





Just some general points on those things will be fine thanks i just need to think through them.|||The surplus will go up.The world interest rate will be distort,and go down.Trade and investment will decline.

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