In 2012 and Again in 2015, Citizens of Greece Were

question 187

Multiple Choice

In 2012 and again in 2015, citizens of Greece were reported to be withdrawing their savings from Greek banks because they feared that Greece would leave the European Union. What is consistent with what the open-economy macroeconomic model predicts?

• A) This event should have raised Grecian interest rates and caused the Grecian currency to appreciate.
• B) This event should have raised Grecian interest rates and caused the Grecian currency to depreciate.
• C) This event should have lowered Grecian interest rates and caused the Grecian currency to appreciate.
• D) This event should have lowered Grecian interest rates and caused the Grecian currency to depreciate.

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Definitions:

Net Operating Cash Flow

The amount of cash generated by a company's normal business operations.

CCA Class

Capital Cost Allowance Class, a categorization in tax systems for depreciation of tangible property.

Tax Rate

The proportion of income or value of goods taxed by the government, applicable to individuals, corporations, and transactions.

Operating Cash Flow

The cash generated from the normal operating activities of a business, reflecting the amount of cash that a company can produce through its normal business operations.