A capital ________ can promote financial instability in an emerging-market country because it is what forces a country to ________ its currency
A) inflow; devalue
B) inflow; revalue
C) outflow; devalue
D) outflow; revalue
C
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A key assumption of most economic analysis is that people act rationally, meaning they respond to incentives
Indicate whether the statement is true or false
Recessions typically cause the unemployment rate to ________ and the inflation rate to ________
A) fall; fall B) fall; rise C) rise; fall D) rise; rise
Under a binding price ceiling, what does the change in consumer surplus represent?
A) The gain in surplus for those buyers who can still purchase the product at the lower price. B) The loss in surplus for those buyers who previously purchased some units of the good at the higher price, but these units are no longer produced at the lower price. C) The loss in surplus for those buyers who would like the purchase the excess demand created by the price ceiling policy. D) Both A and B are correct. E) Both A and C are correct.
Explain how indirect crowding out can offset expansionary fiscal policy
What will be an ideal response?