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:

Comprehension

The ability to understand and process language or information, grasping the meaning of text, speech, symbols, or behavior.

Phonology

The branch of linguistics concerned with the systematic organization of sounds in languages.

Audition

The formal term for the sense of hearing, or the process by which sound waves are converted into neural signals that the brain interprets.

Underextension

The overly restrictive use of words, common in early language development, where a child uses a word only for a specific object rather than for all objects that belong to a particular category.