A Large Open Economy's Real Interest Rate Will Decrease If

question 55

Multiple Choice

A large open economy's real interest rate will decrease if

• A)the expected future marginal product of domestic capital rises.
• B)the expected future marginal product of foreign capital rises.
• C)there is a temporary positive domestic supply shock.
• D)there is a temporary negative domestic supply shock.

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Definitions:

Basidiomycota

A division of fungi characterized by producing spores on basidia.

Lichen

A compound organism consisting of one or more symbiotic fungi and an alga or cyanobacterium.

Fungus

A kingdom of spore-producing organisms that feeds on organic matter, including molds, yeast, mushrooms, and toadstools.

Photoautotroph

Organisms that carry out photosynthesis, using light energy to synthesize organic compounds from inorganic substances.