In an open economy, a decrease in capital inflows ________ the equilibrium domestic real interest rate and ________ the quantity of domestic investment.
A. decreases; decreases
B. decreases; increases
C. increases; decreases
D. increases; increases
Answer: C
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A. Net transfers B. Net investment income C. U.S. goods exports D. U.S. purchases of assets abroad
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Indicate whether the statement is true or false
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