In a Large Open Economy, the Real Interest Rate Is

question 92

Multiple Choice

In a large open economy, the real interest rate is determined by:

• A) national saving, the domestic investment function, and the net capital outflow function.
• B) national saving, the domestic investment function, and the net exports function.
• C) the domestic investment function, the net capital outflow function, and the net exports function.
• D) national saving, the domestic investment function, the net capital outflow function, and the net exports function.

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Definitions:

Potential Energy

Energy stored in the position or arrangement of a system’s components.

Kinetic Energy

The energy that an object possesses due to its motion.

Facilitated Diffusion

Passive transport mechanism in which a solute follows its concentration gradient across a membrane by moving through a transport protein.

Concentration Gradient

A variation in the concentration of a substance across a distance.