Consider Nowehereland, a small open economy. Suppose business people in Nowhereland are pessimistic about the future and their demand for funds decrease. What will happen to real interest rate, net trade balance, net foreign investment and real exchange rate?

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A: a) a surplus and the price will eventually fallHere's why:At a price of $4, the demand and supply…

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A: Approach to solving the question: Detailed explanation: Examples: Key references:

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A: Referencehttps://www.investopedia.com/terms/e/economicprofit.asp

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A: Amortization MethodP = A times r/n/1 - (1 + r/n)^-n times tHowever, since payments are made…

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A: Given: G = 0 = NXS = -200 + 0.1Y, which is of the form: S = -Z + mps*Y [mps = 0.1]Recall, Y = C+SC =…

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A: Referencehttps://pressbooks.bccampus.ca/uvicecon103/chapter/8-3-monopolistic-competition/

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A: The objective of the question is to identify the primary determinant of a product's market price.

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A: We can give the following utilities to the results based on the preferences of the players in table…