In the Open-Economy Macroeconomic Model, Which of the Following Is

question 47

Multiple Choice

In the open-economy macroeconomic model, which of the following is the key determinant of net capital outflow?

• A)the nominal exchange rate
• B)the nominal interest rate
• C)the real exchange rate
• D)the real interest rate

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Definitions:

Short-Term Financing

Short-term financing involves borrowing funds to meet immediate business needs for a period typically less than a year.

Cyclical

Refers to businesses or stocks that are heavily affected by economic changes, often experiencing higher growth in positive economic conditions and contractions during downturns.

Non-Cyclical

Refers to industries or stocks that are relatively unaffected by economic downturns or declines because they provide essential goods or services that continue to be in demand.

Cash Cycle

The amount of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.