In the Open-Economy Macroeconomic Model,if the Supply of Loanable Funds

question 30

Multiple Choice

In the open-economy macroeconomic model,if the supply of loanable funds shifts right,then

• A)net capital outflow increases so the demand for dollars in the market for foreign-currency exchange shifts right.
• B)net capital outflow increases so the supply of dollars in the market for foreign-currency exchange shifts right.
• C)net capital outflow decreases so the demand for dollars in the market for foreign-currency exchange shifts left.
• D)net capital outflow decreases so the supply of dollars in the market for foreign-currency exchange shifts right.

Recognize how personal preferences and income influence utility and purchase decisions.

Calculate the effects of market changes on demand using elasticity equations.

Interpret the implications of demand functions on market revenue.

Understand the concept of deadweight loss in market transactions.

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Definitions:

Capital Goods

Long-lasting goods that are used in the production of other goods or services, such as buildings, machinery, and equipment.

Consumer Goods

Products that are sold directly to consumers for their personal or household use, typically including items like electronics, appliances, and clothing.

Capital Goods

Long-term assets such as machinery, buildings, and equipment purchased by businesses to produce goods and services.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs, assuming full and efficient utilization of resources.