In the Open-Economy Macroeconomic Model, If Investment Demand Increases, Then

question 332

Multiple Choice

In the open-economy macroeconomic model, if investment demand increases, then

• A)the supply of dollars in the market for foreign-currency exchange shifts left.
• B)the supply of dollars in the market for foreign-currency exchange shifts right.
• C)the demand for dollars in the market for foreign-currency exchange shifts left.
• D)the demand for dollars in the market for foreign-currency exchange shifts right.

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Definitions:

Retained Earnings

The portion of a company's profit that is kept or retained rather than distributed to shareholders or reinvested in the company.

Historical Rate

The exchange rate between two currencies at a past date, often used for comparative financial analysis or reporting purposes.

Temporal Method

An accounting method used to convert the financial statements of a foreign subsidiary to the parent company's currency, using exchange rates that change over time.