If There Is Capital Flight from Canada, How Does the Open-Economy

question 168

Multiple Choice

If there is capital flight from Canada, how does the open-economy macroeconomic model change?

• A) Both the supply of loanable funds and the supply of dollars for foreign exchange curves shift right.
• B) Both the supply of loanable funds and the supply of dollars for foreign exchange curves shift left.
• C) The supply of loanable funds shifts left, while the supply of dollars shifts right.
• D) The supply of loanable funds shifts right, while the supply of dollars shifts left.

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Definitions:

Underdevelopment

A condition characterized by a country's or region's low level of economic growth and modernization, often due to various structural challenges.

Overdevelopment

Excessive growth or development beyond what is normal or expected.

Quadri-

A prefix meaning four, used in forming nouns or adjectives that denote four parts, four times, or four dimensions.

Four

The number following three and preceding five, represented in Roman numerals as IV and in Arabic numerals as 4.