7. (15 pts) In recent decades, the economies of the world have become more financially integrated. That is, investors in
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7. (15 pts) In recent decades, the economies of the world have become more financially integrated. That is, investors in
7. (15 pts) In recent decades, the economies of the world have become more financially integrated. That is, investors in many nations have become more willing and able to invest across borders when there are interest rate differences or other differences in return opportunities. a) In the context of a large open economy, what effect has this increased integration had on the slope of the CF (capital flows) function? b) If the CF function changes this way, what happens to the slope of the IS curve? k
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