If International Capital Flows Are Highly Responsive to Interest Rates

question 23

Multiple Choice

If international capital flows are highly responsive to interest rates, expansionary fiscal policy will:

• A)lead to financial account surpluses.
• B)lead to financial account deficits.
• C)be totally ineffective.
• D)lead to current account surpluses.

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Definitions:

Thoreau's Criteria

Standards or principles established by the American transcendentalist Henry David Thoreau, often related to civil disobedience and living simply.

Rule of Law

The principle that all people and institutions are subject to and accountable to law that is fairly applied and enforced.

Government Authority

The legal and formal right given to officials or bodies to make decisions, enforce laws, and administer public resources.

Civil Disobedience

The refusal to comply with certain laws or to pay taxes and fines, as a peaceful form of political protest.