In the monetary small open-economy model with a fixed exchange rate, an increase in the world real interest rate
A) increases domestic output and has no effect on the domestic price level.
B) decreases domestic output and has no effect on the domestic price level.
C) increases the domestic price level and has no effect on domestic output.
D) decreases the domestic price level and has no effect on domestic output.
A
Economics
You might also like to view...
Suppose you buy a bond with a face value of $1,000 for $800. What is the interest rate you receive on the bond?
A) 0.8% B) 1.25% C) 20% D) 25%
Economics
A depreciating nominal exchange rate results from
A) a depreciating real exchange rate. B) a low domestic inflation rate relative to the foreign inflation rate. C) an appreciating real exchange rate. D) a large government budget deficit.
Economics