For a Major Country with Extensive Capital Flows, What Is

question 63

Multiple Choice

For a major country with extensive capital flows, what is the effect of an increase in interest rates?

• A) There will be an inflow of capital, a currency depreciation, and increased net exports.
• B) There will be an inflow of capital, a currency depreciation, and reduced net exports.
• C) There will be an outflow of capital, a currency depreciation, and increased net exports.
• D) There will be an inflow of capital, a currency appreciation, and reduced net exports.

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