- Discuss why a rapid and thus unexpected increase in economic growth can cause an increase in the savings rate.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />
- Distinguish between gross investment and net investment. Can gross investment ever be negative? Can net investment ever be negative?
- Define “interest pegging.” How might the Federal Reserve implement such a policy. Discuss the conditions under which such a policy might be destabilizing.
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