Figure 32-3 Refer to the Following Diagram of the Open-Economy Macroeconomic Model

question 21

Multiple Choice

Figure 32-3
Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow.
​
Graph (a)
Graph (b) Graph (c) ​
-Refer to Figure 32-3. At an interest rate of 4 percent, the diagram indicates that

• A)there is a surplus in the market for foreign-currency exchange.
• B)national saving equals domestic investment.
• C)net capital outflow + domestic investment = national saving.
• D)in the market for foreign-currency exchange the quantity of dollars supplied equals the quantity of dollars demanded.

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Definitions:

Common Stock

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Long-term Borrowings

Loans and financial obligations lasting more than one year, used by businesses to finance major investments or acquisitions.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing debt and equity.

Note Payable

A written promise to pay a specific sum of money to a bearer or a specified person at a future date or on demand.