Question: During the 2000s, many countries in the Arab world experienced significant inflows of capital from outside the region. For example, estimates put the inflow into
During the 2000s, many countries in the Arab world experienced significant inflows of capital from outside the region. For example, estimates put the inflow into the 21 Arab Nations at around $91 billion in 2010. The UAE and Saudi Arabia have been main recipient of this capital inflow over last three decades.
- Using a diagram of the Dubai capital markets as an example, show the effect of this inflow on the rental price of capital in Dubai and the quantity of capital in use.
- Using the diagram of the UAE for labor market, show the effect of the capital inflow on the average wage paid to UAE workers.
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