In a small open economy, the real interest rate will always be
A) above the world real interest rate.
B) below the world real interest rate.
C) equal to the world real interest rate.
D) independent of the world real interest rate.
C
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How would a decrease in consumer income affect the market for new automobiles?
a. Demand would decrease, leading to an increase in price and a reduction in quantity sold. b. Demand would decrease, leading to a reduction in price and a reduction in quantity sold. c. Demand would increase, leading to an increase in price and an increase in quantity sold. d. Demand would increase, leading to a reduction in price and an increase in quantity sold.
Which of the following would tend to shorten recessions associated with anti-inflation policies by central banks?
a. People adjust their expectations of inflation rapidly. b. People believe policy announcements made by central bank officials. c. The short-run Phillips shifts rapidly. d. All of the above are correct.
If the supply of a good is perfectly inelastic, the price elasticity of supply will equal
A. positive infinity. B. zero. C. one. D. none of these.
In the labor market, the income and substitution effects work in the same direction.
Answer the following statement true (T) or false (F)