In the Open-Economy Macroeconomic Model, What Is the Key Determinant

question 141

Multiple Choice

In the open-economy macroeconomic model, what is the key determinant of net capital outflow?

• A) the nominal exchange rate
• B) the nominal interest rate
• C) the real exchange rate
• D) the real interest rate

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Definitions:

Superposition Theorem

The current in any branch of a circuit supplied by a multipower source can be determined by finding the current produced in a particular branch by each of the individual power sources acting alone.

Kirchhoff's Current Law

Kirchhoff's Current Law states that the total current entering a junction or node in an electrical circuit is equal to the total current leaving that junction, preserving the principle of charge conservation.

Algebraic Sum

The result of adding or subtracting a sequence of numbers or algebraic expressions according to mathematical rules.

Kirchhoff's Voltage Law

A principle in electrical engineering that states that the sum of the electrical voltage differences around any closed network is zero.