In the open-economy macroeconomic model, the key determinant of net capital outflow is
a. the real exchange rate. When the real exchange rate rises, net capital outflow rises.
b. the real exchange rate. When the real exchange rate rises, net capital outflow falls.
c. the real interest rate. When the real interest rate rises, net capital outflow rises.
d. the real interest rate. When the real interest rate rises, net capital outflow falls.
d
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England has a relatively cool and cloudy climate that is ill suited for grape growing. It can produce 200 units of wine for every 400 units of cloth. Portugal, in contrast, has a relatively warm and sunny climate that is good for growing grapes. It can produce 200 units of wine for every 100 units of cloth. Which country has the higher opportunity cost of producing cloth?
A. England: 1/2 unit of cloth for every unit of wine B. Portugal: 2 units of wine for every unit of cloth C. Portugal: 1/2 unit of wine for every unit of cloth D. England: 2 units of wine for every unit of cloth