Real domestic interest rates would increase in a large open economy if
A) there were a temporary negative domestic supply shock.
B) the government imposed capital controls and the capital and financial account had been in deficit.
C) foreigners were more willing to save.
D) there were a temporary negative supply shock abroad in a small open economy.
A
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One bag of coffee beans is sold for $7 to a cafe that uses it to brew coffee which it sells to customers for a total of $15. A second bag of coffee is sold directly to Joan for $7, who uses it to brew coffee for her family every morning
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The United States imports television sets from Japan. The table above contains the U.S. demand and U.S. supply schedules for television sets. The world price of a television set is $600 per set
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