Suppose That in the 1990s, Canadian Net Capital Outflow Fell

question 194

Multiple Choice

Suppose that in the 1990s, Canadian net capital outflow fell. Which of the following could explain this?

• A) an increase in the demand for Canadian currency in the foreign-currency exchange
• B) a decrease in the demand for Canadian currency in the foreign-currency exchange
• C) an increase in the demand for loanable funds
• D) a decrease in the demand for loanable funds

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Definitions:

Short Run

A period in economic theory during which at least one input, such as plant size or the number of firms in the industry, is fixed and cannot be changed.

Perfect Competitor

A theoretical market structure in which many firms sell an identical product, and no single buyer or seller can influence the market price.

Perfectly Competitive Industry

A market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller can affect the market price.

Economic Profits

Profits exceeding the next best alternative use of resources, considered abnormally high in economic terms.