The domestic real interest rate (r) for a given country must be the same as the world real interest rate (rw) ________
A) if perfect capital mobility is assumed
B) because with no barriers to capital flows, if rw > r domestic residents would just borrow abroad putting upward pressures on the domestic rate until both rates equal each other
C) because with no barriers to capital flows, if rw < r domestic residents would only lend to foreigners putting downward pressures on the domestic rate until both rates equal each other
D) all of the above
E) none of the above
A
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If a government wants to maximize revenues from a tax, it should
A) impose it on sellers. B) impose it on consumers. C) choose a good with a relatively elastic demand. D) choose a good with a relatively inelastic demand.
A state of consumer equilibrium for two goods consumed exists when the:
a. marginal utility of all goods is the same for the last dollar spent on each good. b. marginal utility per dollar's worth of two goods is the same for the last dollar spent on each good. c. price of two goods is the same for the last dollar spent on each good. d. marginal cost per dollar spent on two goods is the same.