The Domestic Real Interest Rate (R)for a Given Country Must

question 20

Multiple Choice

The domestic real interest rate (r) for a given country must be the same as the world real interest rate (rw) ________.

• A)only if capital is not perfectly mobile
• B)because with no barriers to capital flows,if rw > r domestic residents would just lend abroad putting upward pressures on the domestic rate until both rates equal each other
• C)because with no barriers to capital flows,if rw < r domestic residents would only lend to foreigners putting downward pressures on the domestic rate until both rates equal each other
• D)all of the above
• E)none of the above

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Definitions:

Sample

A subset of individuals or elements selected from a larger population, used to make inferences or observations about the population as a whole.

Correlational

Pertaining to a research method that examines the relationship between two or more variables to determine if they are associated.

Experimental Study Designs

Research methods that allow investigators to directly manipulate variables to investigate cause-and-effect relationships between variables.

Line of Best Fit

A straight line drawn through the center of a group of data points plotted on a scatter plot, used to analyze and predict the relationship between variables.