High-mobility international capital markets exist when:
a. Changes in any of the three key macroeconomic markets affect the other two markets weakly.
b. Changes in any of the three key macroeconomic markets affect the other two markets strongly.
c. Current international transactions effects outweigh net nonreserve-related international borrowing/lending effects.
d. Net nonreserve-related international borrowing/lending effects outweigh current international transactions effects.
.D
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The price elasticity of demand measure is generally stated as an absolute value
a. True b. False Indicate whether the statement is true or false
If a firm faces ______, while the prices for the output the firm produces remain unchanged, a firm’s profits will increase
a. higher demand b. lower costs of production c. equilibrium d. a shift in demand
Economic theory indicates that as a larger share of medical services are paid for by a third party (for example, insurance companies or the government) rather than directly by the consumer,
a. consumers will have a stronger incentive to economize. b. consumers will have a weaker incentive to economize and the prices of medical services will rise more rapidly than would otherwise be the case. c. consumers will have a weaker incentive to economize, but medical service suppliers will have a stronger incentive to keep prices low. d. the suppliers of medical services will have more incentive to economize.
Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. The income effect is shown by the movement:
A. from bundle A to bundle C.
B. from bundle A to bundle B.
C. from bundle B to bundle C.
D. from bundle C to bundle B.