The poorer countries of the world tend to run current-account surpluses (thus exporting capital) and the richer nations tend to run current-account deficits (thus importing capital).
Collect some international data to support the above statement.
If poor nations offer better production efficiency and legal protection, what would happen to the investment function in those countries?
How would the change you describe in part (b) affect the demand for loanable funds in would financial markets?
How would the change you describe in part (c) affect the world interest rate?
How would the change you describe in part (d) affect the trade balance in rich nations?
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