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Suppose that US mutual funds suddenly decide to invest more in Canada. a. What happens to...

Suppose that US mutual funds suddenly decide to invest more in Canada.

a. What happens to Canadian net captial outflow, Canadian saving and Canadian domestic investment? (6%)

b. What is the long-run effect on the Canadian capital stock? (2%)

c. How will this change in the capital stock affect the Canadian labour market? Does this US investment in Canada make Canadian workers better off or worse off? (7%)

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