Other Things the Same,as the Real Interest Rate Rises

question 140

Multiple Choice

Other things the same,as the real interest rate rises

• A)domestic investment and net capital outflow both rise.
• B)domestic investment and net capital outflow both fall.
• C)domestic investment rises and net capital outflow falls.
• D)domestic investment falls and net capital outflow rises.

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Definitions:

Monopolistically Competitive Industry

Refers to a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing the excess over the opportunity cost.

Pure Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price-taking behavior.

Nonprice Competition

Competition based on distinguishing one’s product by means of product differentiation and then advertising the distinguished product to consumers.