According to the Open-Economy Macroeconomic Model, a Decrease in the U.S

question 83

True/False

According to the open-economy macroeconomic model, a decrease in the U.S. government budget deficit increases U.S. net capital outflow, causes the real exchange rate of the dollar to depreciate, and increases U.S. net exports.

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Definitions:

Equity

Ownership interest in a company, represented by shares, which gives shareholders a claim on part of the company's assets and earnings.

Equity Financed

The method of raising capital through the sale of shares in a company.

Retained Earnings

The portion of a company’s profit that is held back and not distributed to shareholders as dividends, to be reinvested in the business.

EBIT

Earnings Before Interest and Taxes - an indicator of a company's profitability that calculates income without tax expenses and interest expenses.