Self-Interest

question 17

Multiple Choice

Self-interest

• A) reflects choices that are best for society as a whole.
• B) reflects choices that are best for the individual who makes them.
• C) has nothing to do with determining what goods are produced.
• D) occurs only when wants exceed available resources.
• E) cannot be used to determine how goods are produced.

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Definitions:

Real Exchange Rate

An adjusted exchange rate between two currencies that reflects the purchasing power of the two currencies; it factors in the relative prices of a standard set of goods and services in each country.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international financial transactions.

Domestic Investment

Refers to the total capital investment in an economy by its residents and businesses, excluding investments in foreign assets.

Net Capital Outflow

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners in an economy.