The key determinant of net capital outflow.

How should Netflix analyze differences and distances between India and its other markets crafting strategies for the Indian market and consumers? (CAGE framework).

The key determinant of net capital outflow is the real interest rate When the US interest rate is high, owning US assets is more attractive, and US net capital outflow is low This shows this negative relationship between the interest rate and net capital outflow A net-capital-outflow curve is the link between the market for loan able funds and the market for foreign-currency exchange Why is this important? You may want to review material dealing with the real equilibrium in an open economy

The government has decided that the free-market price for milk is too low

i In an attempt to help dairy farmers increase their income the government imposes a price floor in the milk market Use demand and supply diagrams to illustrate the impact of this policy on the price of milk and the quantity sold as well as the state of the market

ii Can dairy farmers be assured of an increased income? Explain your answer

iii Would it be a good decision for the government to purchase all the surplus product? Explain your answer


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