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
Suppose that there is a natural disaster that destroys part of the nations capital stock. Determine the effect on aggregate output, consumption, employment, and the real wage,
Consider the following distribution of income in a 12-person economy, with the modern urban wage = 3, the traditional rural income = 1 and the informal urban wage = 2: (1, 2,
Suppose my tastes could be modeled with the utility function u(x1, x2) = 20x1^0.5 + x2, where x1 refers to mozartkugeln and x2 refers to other consumption. consider the bundle
The demand curve for cookies is downward sloping. When the price of cookies is 2 dollars, the quantity demanded is 100.If the price rises to 3 dollars, what happens to consume
Consider a labor market where the demand for a particular category of labor is given by the equation LD = 20 – 2W. Suppose that the supply curve of workers in this market who
For each of the following, state whether it is considered money in the United States. Explain why or why not. The available credit you have on your Master Card. Federal Reserv
Suppose a worker faces the wage w, has time endowment T, and has non-labor income Y. a. Draw the budget constraint over leisure and money spent on consumption goods (M) for
Suppose that Joe enjoys and repeatedly does stupid things like getting heavily into debt and insulting police officers. Do these actions constitute systematic errors? If he ge