Other Things the Same,an Increase in the Interest Rate Would

question 167

Multiple Choice

Other things the same,an increase in the interest rate would tend to reduce

• A)domestic investment, but not net capital outflow.
• B)net capital outflow, but not domestic investment.
• C)both domestic investment and net capital outflow.
• D)neither domestic investment nor not capital outflow.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced in an economy in real terms.

Nominal GDP

The market value of all final goods and services produced within a country in a year, measured using current prices without adjusting for inflation.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to real GDP.

Per Capita Real GDP

An economic metric that measures the economic output of a country adjusted for inflation and divided by the total population.