Podcast
Questions and Answers
What determines whether a country will experience capital inflows or outflows when it opens its financial account to foreign investors?
What determines whether a country will experience capital inflows or outflows when it opens its financial account to foreign investors?
- Difference between savings and investment for the current world interest rate (correct)
- Difference between consumer spending and disposable income
- Difference between government spending and taxation
- Difference between exports and imports of goods
When will a country most likely experience capital inflows according to the text?
When will a country most likely experience capital inflows according to the text?
- When labor efficiency is low
- When labor efficiency is high (correct)
- When the savings rate is high
- When the world interest rate is high
Why do emerging countries with higher productivity growth tend to experience net capital outflows according to the text?
Why do emerging countries with higher productivity growth tend to experience net capital outflows according to the text?
- Because of higher national savings (correct)
- Due to lower productivity growth reducing investment
- Higher productivity leading to lower national savings
- Lack of access to foreign capital markets
In the context of net capital flows, what happens if the world interest rate is lower than the interest rate in autarchy?
In the context of net capital flows, what happens if the world interest rate is lower than the interest rate in autarchy?
Which factor is more likely to lead a country to experience capital inflows according to the text?
Which factor is more likely to lead a country to experience capital inflows according to the text?
What is the impact of a low savings rate on a country's likelihood to experience capital inflows?
What is the impact of a low savings rate on a country's likelihood to experience capital inflows?
What happens to the steady-state capital stock per worker when a small open economy has unlimited access to borrowing or lending in world capital markets?
What happens to the steady-state capital stock per worker when a small open economy has unlimited access to borrowing or lending in world capital markets?
In the long-run steady state of the closed economy, what happens to GDP per capita?
In the long-run steady state of the closed economy, what happens to GDP per capita?
What does it mean when a country is a net borrower vis-à-vis the rest of the world?
What does it mean when a country is a net borrower vis-à-vis the rest of the world?
How does financial openness affect the cost of capital in the small open economy?
How does financial openness affect the cost of capital in the small open economy?
In the context of net capital flows, what condition must be met for a country to be a net borrower?
In the context of net capital flows, what condition must be met for a country to be a net borrower?
What is the relationship between the world interest rate and the growth rate of population in an open economy?
What is the relationship between the world interest rate and the growth rate of population in an open economy?
What role does productivity growth play in determining the steady-state capital stock in the open economy?
What role does productivity growth play in determining the steady-state capital stock in the open economy?
What inequality must hold for a country to experience capital inflows?
What inequality must hold for a country to experience capital inflows?
How does an increase in the world interest rate affect the steady-state capital stock in the small open economy?
How does an increase in the world interest rate affect the steady-state capital stock in the small open economy?
What happens to net capital flows in the small open economy when it moves from a closed to an open capital account regime?
What happens to net capital flows in the small open economy when it moves from a closed to an open capital account regime?
What determines the GDP per capita in a closed economy according to the provided text?
What determines the GDP per capita in a closed economy according to the provided text?
What factor affects the ratio of GDP per capita in an open economy to that in a closed economy?
What factor affects the ratio of GDP per capita in an open economy to that in a closed economy?
