Long-run effects of rise in safe-haven capital inflow
Course:- Business Economics
Reference No.:- EM13891935

Assignment Help
Assignment Help >> Business Economics

In the five years ending 2011, Switzerland enjoyed a fiscal surplus that averaged 1.3% of GDP, a trade surplus that averaged 2.6% of GDP, and a government debt to GDP ratio that averaged 40%. With the Eurozone economies rocked by a destabilizing sovereign debt crisis, investors over the world consider Switzerland as a safe-haven and increase their purchases of Swiss assets. Assume Switzerland is a small open economy and its consumption demand is a function of disposable income only. Use the appropriate graphs for a small open economy to illustrate and explain the theoretical long-run effects of the rise in “safe-haven” capital inflow into Switzerland on each of the following: Switzerland’s national savings, investment, net capital outflow, net exports, and the real exchange rate of the Swiss franc.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
Experience does not necessarily have to be work experience. Discuss market equilibrating process in relation to your experience. One of early economic "laws" was called Say's
We see the U.S. tends to import more goods than they export. Regardless of the imbalance of trade the U.S is still an economically competitive country. Do you think trade is j
Suppose that Rocky’s Box Corporation is one small firm in the cardboard box industry. Rocky’s boxes are identical to those made by other firms. Assume that his corporation has
Why is there currently an even greater need for effective employee communications? Describe some efforts made by U.S. firms that demonstrate the uniquely American concept of c
Let us examine the market for smart phones. Assume that the inverse market demand function is given by p = 240-2Q. Initially, firm A and firm B produce at equal unit cost, c0.
What are some of the main points of dispute with regard to the No Child Left Behind Act? How do you feel about some of these criticisms? In what ways can/should the Christian
Although the European Union (EU) is the most advanced form of regional integration, it is currently facing a challenging time. What are some major challenges facing the EU?
Why does Krugman call Obamacare “The Big Kluge”? What is his explanation for why we didn’t expand Medicare? What do the two interest groups – the currently insured and the Ins