An increase in US real interest rates relative to the rest of the world can be expected to
a. encourage investment spending by US firms in the US
b. decrase the capital flow into the US
c. cause a net outflow of foreign captial from the US
d. increase the international value of the dollar
e. improve the situation for exporters
Answer: d. increase the international value of the dollar
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Studies by economists suggest that
A) households do not increase their saving as the government's dissaving increases. B) households increase their saving, but not by the full amount of an increase in government dissaving. C) households also increase their dissaving when the government increases its dissaving. D) households also increase their saving when the government increases its saving.
The existence of an inflationary gap should cause
A. wages to fall. B. prices to fall. C. unemployment to rise. D. net exports to rise.
When the IMF provides loans to developing countries, it often requires these countries to adopt:
A. a contractionary fiscal policy and an expansionary monetary policy. B. contractionary monetary and fiscal policies. C. expansionary monetary and fiscal policies. D. a contractionary monetary policy and an expansionary fiscal policy.
Which of the following is a positive economic statement?
A. No individual should live in poverty. B. Economic considerations are less relevant than ethical issues in deciding national policy. C. The unemployment rate of males exceeds that of females. D. Unemployment is a more serious societal problem than inflation.