Under perfect capital mobility, an increase in world interest rates will
a. increase income and reduce domestic interest rates.
b. increase income.
c. increase income and lead to a balance of payment deficit.
d. increase income and lead to a balance of payment surplus.
B
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The present value of receiving M dollars in year t when the prevailing interest rate is i is equal to
a. M - it b. M ? (1 - i)t c. M/(1 + i)t d. M ? it e. M/it
Approximately ____ percent of federal government spending in 2007 was for transfer payments and interest payments
a. 5 b. 10 c. 55 d. 30 e. 75
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2. B. P2 and Y3. C. P3 and Y1. D. P2 and Y2.
Goods are allocated in a market system by price rationing.
Answer the following statement true (T) or false (F)