Other Things the Same,in the Open-Economy Macroeconomic Model,which of the Following

question 39

Multiple Choice

Other things the same,in the open-economy macroeconomic model,which of the following would make China's net capital outflow increase?

• A)an increase in U.S.interest rates
• B)an increase in Chinese interest rates
• C)an appreciation of the Chinese yuan
• D)None of the above is correct.

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Definitions:

Economic Recovery

A period of increasing business activity signaling the end of a recession, marked by a rise in GDP, employment, and consumer spending.

Transfer Payments

These are payments made by the government to individuals or other entities without expecting any goods or services in return, such as social security benefits or unemployment compensation.

Federal Income Tax

A tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Paradox Of Thrift

The economic theory that suggests individual savings can lead to a decrease in aggregate demand, thus hindering economic growth.