If the Foreign Exchange Market Is in Equilibrium and Attractive

question 28

Multiple Choice

If the foreign exchange market is in equilibrium and attractive domestic investment opportunities result in a net inflow of capital,

• A) the nation will experience a trade deficit.
• B) the nation will experience a trade surplus.
• C) interest rates will rise in the loanable funds market.
• D) the actual rate of unemployment must exceed the natural rate of unemployment.

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Definitions:

Ulcerations

The formation of open sores on the skin or mucous membranes, often resulting from inflammation or infection.

Digestive System

An organ system that breaks down food into absorbable units to provide energy and nutrients to the body while disposing of waste products.

Small Intestine

A part of the gastrointestinal tract between the stomach and large intestine, where most of the digestion and absorption of nutrients occurs.

Large Intestine

The final section of the digestive system, responsible for water absorption and the formation of feces.