The Portfolio-Balance Approach Assumes

question 10

Multiple Choice

The Portfolio-Balance Approach assumes:

• A) imperfect capital mobility
• B) perfectly elastic demand for foreign bonds
• C) interest rate equalization across countries
• D) imperfect substitution between domestic and foreign bonds

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Definitions:

Animism

The belief that objects, places, and creatures all possess a distinct spiritual essence.

Irreversibility

The cognitive inability in young children to understand that actions cannot always be undone, a concept studied in developmental psychology.

Piagetian Development

A theory of cognitive development by Jean Piaget that outlines how children progress through four stages of growth, acquiring key skills and abilities.

Preoperational

A stage in Jean Piaget’s theory of cognitive development where children from about 2 to 7 years old engage in symbolic play but lack operations (logical rules) for consistent reasoning.