Which of the Following Is Most Likely to Result If

question 104

Multiple Choice

Which of the following is most likely to result if foreigners decide to withdraw the funds that they have loaned to the United States?

• A)U.S. net exports will rise
• B)U.S. net capital outflow will fall.
• C)U.S. domestic investment will rise
• D)the dollar will appreciate

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Definitions:

Long Run

A period in which all factors of production and costs are variable, and firms can adjust all inputs.

Inputs Fixed

Refers to factors of production (like capital and land) that remain constant in quantity, regardless of the level of output.

Inputs Variable

Factors of production such as labor, land, and capital that are used to create goods and services.

Long-Run Adjustment

A process businesses undergo to alter their level of output in response to economic changes, ensuring long-term economic efficiency and resource allocation.