Other things the same, if the Japanese real interest rate were to increase, Japanese net capital outflow
a. and net capital outflow of other countries would rise.
b. and net capital outflow of other countries would fall.
c. would rise, while net capital outflow of other countries would fall.
d. would fall, while net capital outflow of other countries would rise.
d
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The theory of comparative advantage implies that
A. the United States could have a comparative disadvantage in producing all goods and services. B. two countries can have a comparative advantage in production of the same good. C. the world gains from trade since it allows production to move to the countries where their opportunity cost is lowest. D. the country with the comparative advantage also has an absolute advantage.
Which of the following describes the law of diminishing control?
A. After regulations are enacted, institutions find ways around the regulations. B. The Federal Reserve Bank cannot impact excess reserves and the money supply. C. Financial institutions have few ways to assess the solvency of borrowers. D. As people engage in leverage, they have less and less control over the price of the asset.
A welfare recipient receives $10,000 in benefits when he does not work but receives an income of $15,000 when he works part-time and earns $6,000 in wages. What is the implicit marginal tax rate the recipient faces?
A. 15.5 percent. B. 0 percent. C. 16.6 percent. D. 100 percent.