When analyzing the effects of changes in demand in an open economy, we assume that firms:
a. have only one fixed rate of return on various projects when deciding investment activity.
b. have differing returns on various projects when deciding investment activity.
c. are required to borrow only from domestic banks when funding investment activity.
d. consider the effects of inflation on investment activity.
Ans: b. have differing returns on various projects when deciding investment activity.
Economics
You might also like to view...
How did the international monetary system influence macroeconomic policy-making and performance during the interwar period (1918-1939)?
What will be an ideal response?
Economics
Balance of payments deficits arise whenever the exchange rate is set at an artificially high level.
Answer the following statement true (T) or false (F)
Economics