Suppose that U.S. citizens start saving more. What does this imply about the supply of loanable funds and the equilibrium real interest rate? What happens to the real exchange rate?
The supply of loanable funds increases, and the equilibrium real interest rate falls. Because of the lower interest rate, U.S. net capital outflow rises. This increase makes the supply of dollars shift to the right, and the real exchange rate of the dollar depreciates.
You might also like to view...
According to the textbook application, hybrid vehicles
a. were introduced to the mass market by Honda and Toyota b. use an electric motor for start-up and low speeds and a small conventional motor for normal speeds c. generate reduced emissions and provide high fuel efficiency d. all of the above e. none of the above
Patents encourage invention by
A) offering subsidies to inventors. B) offering tax breaks to inventors. C) allowing patent owners to make an economic profit. D) preventing inventors from working on the same project.
When society gets the most it can from its scarce resources, then the outcome is called
a. equitable. b. efficient. c. normal. d. efficacious.
What is the term for offering different opportunities to similar individuals who differ only by race, ethnic group, sex, age, or other personal characteristics?