In the Open-Economy Macroeconomic Model,if Investment Demand Increases,then

question 35

Multiple Choice

In the open-economy macroeconomic model,if investment demand increases,then

• A)net exports and the real exchange rate rise.
• B)net exports rise and the real exchange rate falls.
• C)net exports fall and the real exchange rate rises.
• D)net exports and the real exchange rate fall.

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Mortgagor

The borrower in a mortgage agreement, who pledges property to the lender as security for the loan.

Fixed Rate

An interest rate that remains constant over the duration of the loan, bond, mortgage, or any financial product.

Loan

A sum of money that is borrowed, typically from a financial institution, which is expected to be paid back with interest.