Examlex
Suppose aggregate output is demand-determined.If the simple multiplier is 4 and there is a $10 billion increase in planned investment spending,then equilibrium income will ________ and the marginal propensity to spend must equal ________.
Long-Run Exchange Rate
The exchange rate that reflects the underlying fundamentals of an economy over a longer period, free from short-term fluctuations.
Subsidiary
A company controlled by another company, often referred to as its parent company.
Interest Rate Parity
A theory in financial economics that suggests the difference between the interest rates of two countries is equal to the difference between the forward exchange rate and the spot exchange rate.
Forward Rate
The agreed-upon price for a financial transaction that will occur at a future date, used primarily in foreign exchange and interest rate markets.
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