In an Open Economy with Internationally Mobile Financial Capital, We

question 78

Multiple Choice

In an open economy with internationally mobile financial capital, we would expect a policy- induced increase in the government's budget deficit to crowd out

• A)consumption more than net exports.
• B)investment more than net exports.
• C)net exports more than investment.
• D)government purchases more than net exports.
• E)consumption more than investment.

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Definitions:

Discontinuous Innovation

Refers to breakthrough advancements that significantly change the market dynamic or consumer behavior, introducing a new category of products or services.

Cultural Categories

The classifications within a culture that help to differentiate between various social norms, practices, and beliefs.

Complexity Paradox

The concept that systems can reach a point of complexity where they actually exhibit behaviors or properties that are simpler than expected, often due to self-organization.

Social Diffusion

The process by which innovations are spread within a society or from one society to another, often through various channels of communication.