In an Open Economy with a Given Level of Real

question 69

Multiple Choice

In an open economy with a given level of real interest rates and risk, an increase in real interest rates abroad will ________ capital inflows and ________ the equilibrium domestic real interest rate.

• A)increase; increase
• B)increase; decrease
• C)decrease; decrease
• D)decrease; increase

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Definitions:

Scoring Rubric

A set of criteria and standards used for assessing performance, work, or behavior.

Critical Thinking

The process of logically analyzing and evaluating information or arguments to form a judgment or conclusion.

Society

A group of individuals living together in a more or less ordered community, often sharing common cultural and social institutions.