In the Portfolio Balance Approach, Which One of the Following

question 19

Multiple Choice

In the portfolio balance approach, which one of the following, other things equal, will cause an increase in the demand for domestic bonds by home country citizens?

• A) a decrease in the home country interest rate
• B) a increase in the home country price level
• C) an increase in the home country real income level
• D) a decrease in the expected rate of appreciation of the foreign currency (or a decrease In the expected rate of depreciation of the home currency)

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Definitions:

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, along with certain younger people with disabilities.

Excise Taxes

Taxes paid when purchases are made on a specific good, such as gasoline or tobacco, often included in the price of the product.

Tax Burden

The measure of the total amount of taxes that individuals, businesses, or other entities must pay.

Medicaid

Medicaid is a government-funded program in the United States that provides health care services to low-income individuals and families.