In the Portfolio Balance Model, Other Things Equal, an Increase

question 16

Multiple Choice

In the portfolio balance model, other things equal, an increase in home country wealth because of a current account surplus

• A) will reduce home country demand for money.
• B) will reduce home country demand for foreign bonds.
• C) will have an indeterminate effect on the domestic interest rate (without more Information).
• D) will not affect the domestic demand for either foreign or domestic bonds.

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Definitions:

Regulatory Force

External forces, often in the form of government laws, regulations, and policies, that can impact a business’s operations and its approach to the market.

Environmental Scanning

The process by which businesses monitor and analyze their external environment to identify opportunities and threats.

Technological Environmental Force

Influences in the business environment resulting from changes in technology, impacting how products are produced, marketed, and distributed.

Social Force

Factors arising from societal norms and cultural values that influence individuals' behaviors, attitudes, and interactions within a community.