The supply curve of money is horizontal at the market interest rate.

If the random walk theory is correct, a prudent investor might choose her stock portfolio by

a. throwing darts at the newspaper's financial page. b. spending money to consult a stock forecaster. c. spending time analyzing past stock performance. d. not investing in stocks at all, since price behavior is completely erratic.

If the American company Stryker builds and operates a new factory in France,

a. it engages in foreign direct investment. By itself this action lowers U.S. net capital outflow. b. it engages in foreign direct investment. By itself this action raises U.S. net capital outflow. c. it engages in foreign portfolio investment. By itself this action lowers U.S. net capital outflow. d. it engages in foreign portfolio investment. By itself this action raises U.S. net capital outflow.