In a world where capital moves rapidly across national boundaries, if a larger budget deficit leads to higher real interest rates,
a. there will be an inflow of foreign capital, which will cause the dollar to appreciate and net exports to decline.
b. there will be an outflow of foreign capital, which will cause the dollar to depreciate and net exports to increase.
c. there will be an inflow of foreign capital, which will cause the dollar to depreciate and net exports to increase.
d. there will be an outflow of foreign capital, which will cause the dollar to appreciate and net exports to decline.
A
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When consumers are less confident about their jobs or incomes, they are more likely to
A) reduce purchases of durable goods than nondurable goods. B) increase consumption spending and decrease investment spending. C) reduce purchases of nondurable goods and increase purchases of durable goods. D) increase investment spending and decrease consumption spending.
Government rules and regulations can, at times,
A) improve the function of property rights. B) limit free-riders. C) reduce negative externalities. D) all of these choices.