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:

Wilhelm Wundt

A German psychologist who is often considered the father of experimental psychology, having established the first psychology laboratory in Leipzig, Germany, in 1879.

Basic Elements

Fundamental components or building blocks of a larger system.

Structuralism

An approach in psychology that seeks to understand the structure of the mind by analyzing the components of mental experiences.

Psychological Approach

A method or strategy in psychology that focuses on understanding mental processes, behaviors, and emotional responses of individuals.