In the open-economy macroeconomic model, if the supply of loanable funds increases, then the interest rate
a. and the real exchange rate increase.
b. and the real exchange rate decrease.
c. increases and the real exchange rate decreases.
d. decreases and the real exchange rate increases.
b
You might also like to view...
Which one of the following will shift the consumption function downward?
a. An increase in disposable income. b. A decrease in disposable income. c. Legislation making credit harder to obtain. d. Lower tax rates. e. A technological breakthrough.
Capitalism is an economic system that:
A. gives private individuals and corporations the right to own productive resources. B. produces more consumer goods than capital goods. C. produces more capital goods than consumer goods. D. is characterized by government control of markets.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. For a worker in Country A, the trade-off of making one tomato is:
A. 4 bananas. B. 2 bananas. C. 3 bananas. D. 5 bananas.
Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Which of the following statements can be said of Country A? Country A:
A. has the comparative advantage in car and truck production. B. does not possess the comparative advantage in either good. C. has the comparative advantage in truck production only. D. has the comparative advantage in car production only.