Which of the following events will increase the domestic real interest rate in an open economy?
A. A decrease in the domestic saving
B. An increase in net capital inflow
C. An increase in domestic saving
D. A decrease in the perceived riskiness of investing in the domestic economy
Answer: A
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When economists talk about the gains from trade they mean that
A) no one ever gets hurt by trade. B) the benefits of trade outweigh the losses. C) business firms benefit from trade but not necessarily individuals. D) trade increases government revenue through taxes on imports. E) economic restructuring is usually quick and painless.
A price ceiling set below the market clearing price will tend to cause which of the following?
A) a surplus B) a shortage C) an increase in demand D) a reduction in supply
Network externalities
A) can only exist when there are economies of scale. B) prevent the dominance of a market by one firm. C) exist when the usefulness of a product increases with the number of consumers who use it. D) are created when celebrity endorsements of products lead to a surge in the demand for those products.
In a binding situation, the ________ curve is ________.
A. AD; vertical B. AS; horizontal C. AS; vertical D. AD; horizontal