For a country with flexible exchange rates, if a nation's interest rate rose, what effect would this have on its current account balance?
a. No effect because interest has no effect on the current account.
b. Increase it because foreign capital flows would be attracted to the nation thereby building economic strength.
c. Decrease it because the exchange rate will appreciate.
d. Increase it because the exchange rate will depreciate.
e. Decrease because the exchange rate will depreciate.
.C
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In the dynamic aggregated demand and aggregate supply model, if AD shifts faster than AS
A) stagflation occurs. B) deflation occurs. C) disinflation occurs. D) inflation occurs.
When the price of a good changes, the income effect can be found by comparing the equilibrium quantities purchased
A) on the old budget line and the new budget line. B) on the original indifference curve when faced with the original prices and when faced with the new prices. C) on the new budget line and a hypothetical budget line that is a shift back to the original indifference curve parallel to the new budget line. D) on the new indifference curve.
This table shows individual demand schedules for a market.Price of GoodBarney's DemandBetty's Demand$0.002023$0.501818$1.001611$1.50148$2.00126$2.50105According to the table shown, what can be said of Betty and Barney's demand for this good?
A. Neither Betty's nor Barney's demand follows the law of demand. B. Barney's demand follows the law of demand, but Betty's does not. C. Betty's and Barney's demand both follow the law of demand. D. Betty's demand follows the law of demand, but Barney's does not.
For which of the following types of firms is the buying and selling of stocks and bonds not a primary function?
A. securities firms B. investment banks C. mutual fund companies D. thrifts