In an Open Economy with a Given Level of Real

question 69

Multiple Choice

In an open economy with a given level of real interest rates and risk, an increase in real interest rates abroad will ________ capital inflows and ________ the equilibrium domestic real interest rate.

• A)increase; increase
• B)increase; decrease
• C)decrease; decrease
• D)decrease; increase

---

Definitions:

Self-Dealing

Any instance in which directors or officers make decisions that violate their corporate duty of loyalty.

Penalty

A punishment imposed for breaking a law, rule, or contract which often involves paying a fine or undergoing some form of restraint.

Implied Powers

Powers not explicitly stated but are considered necessary for fulfilling the expressly granted powers of an authority or government body.

Incorporated

refers to the process by which a business becomes a legally recognized entity that is distinct from its owners, providing benefits like liability protection and tax advantages.