Which of the following statements about rates of return is most likely correct?
a. Countries with relatively low real rates of return (for example, low interest rates) will tend to experience weaker currencies as they attract money from abroad.
b. Countries with relatively high real rates of return (for example, high interest rates) will tend to experience weaker currencies as they attract money from abroad.
c. Countries with relatively low real rates of return (for example, low interest rates) will tend to experience stronger currencies as they attract money from abroad.
d. Countries with relatively high real rates of return (for example, high interest rates) will tend to experience stronger currencies as they attract money from abroad.
d. Countries with relatively high real rates of return (for example, high interest rates) will tend to experience stronger currencies as they attract money from abroad.
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
When GDP is measured in "current prices" it is known as the
A) real GNP. B) real GDP. C) nominal GNP. D) nominal GDP.
An increase in ________ will shift the supply of loanable funds curve ________
A) expected future income; rightward B) wealth; leftward C) disposable income; leftward D) default risk; rightward
In the interest-rate-based transmission mechanism, a decrease in the money supply will
A) reduce investment, shift the aggregate demand function inward, and lower real Gross Domestic Product (GDP). B) reduce the rate of interest and the level of investment. C) increase the price level. D) shift the aggregate supply function inward and increase real Gross Domestic Product (GDP).