MGEC61H3 Study Guide - Midterm Guide: Government Spending, Mark May, Capital Account

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEC61H3
• Professor: Iris Au

Document Summary

Part (a) (15 points) 1 point will be subtracted for each incorrect entry. Part (b) (5 points) (4 pts for explanation) Change in a country"s foreign wealth = ka = (kanon-res + ort: when ka is positive, this implies the country is a net seller of assets its holding of foreign assets . 415: since the change in foreign wealth is negative for b; thus, b finds its foreign wealth , foreign wealth decreases by 500. (1 pt, note: you should comment on the country"s kanon-res and ort not just one. Besides, you should show what happens to all three countries not just what happens to one country. Question 2 (20 points) ( 2 pts from the whole question for not having 4 decimal points) Part (a) (4 points: expected exchange rate, ee: (2 pts 1 pt for showing work & 1 pt for the answer)