Which of the Following Is Correct Concerning the Open-Economy Macroeconomic

question 33

Multiple Choice

Which of the following is correct concerning the open-economy macroeconomic model?

• A)The net-capital-outflow curve slopes upward.
• B)The key determinant of net capital outflow is the real exchange rate.
• C)The supply of dollars in the market for foreign-currency exchange is vertical.
• D)None of the above is correct.

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Definitions:

Product Price

The financial outlay necessary to acquire a certain item or service.

Competitive Firm

A business that operates in a market where it has multiple competitors, and no single firm can influence the market price of goods or services.

Short Run

A time period in economics where at least one input is fixed, restricting the ability to adjust production levels fully.

Long Run

A timeframe during which all production factors and expenses can change, permitting adjustments to all inputs.