What happens to each of the following if investment becomes less desirable at each interest rate? A. the interest rate B. net capital outflow C. the exchange rate
The interest rate falls, net capital outflow rises, the exchange rate falls.
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The activist response to the monetarist platform says that
A) private spending may show some stability, but monetary or fiscal policy designed to stabilize it will just make things worse. B) private spending is stable partly because consumption spending is based on permanent income. C) even if prices are not completely flexible in the short-run, given time there is enough flexibility for the system to return to the natural level of real GDP. D) None of the above.
The government might provide a subsidy when
A) a negative externality exists. B) an effluent fee has been unsuccessful. C) it wants to increase the amount of a good consumed. D) it wants to transform a negative externality into a positive externality.