An economic benefit of capital outflows is that they
A) create future income payment inflows.
B) increase domestic investment.
C) reduce domestic saving.
D) reduce domestic unemployment.
A
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Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the nominal exchange rate and monetary base in the context of the Three-Sector-Model? a. The nominal exchange rate rises and monetary base rises
b. The nominal exchange rate remains the same and monetary base falls. c. The nominal exchange rate remains the same and monetary base rises. d. The nominal exchange rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
If, for a given disposable income level, the disposable income line lies above the consumption curve, saving:
A. equals consumption. B. is greater than zero. C. is less than zero. D. is equal to zero.