Because the United States is highly integrated with the international capital market, international capital flows tend to a. strengthen the negative effects on aggregate demand of lower interest rates. b. counteract the negative effect on aggregate demand of lower interest rates. c. counteract the positive effect on aggregate demand of higher interest rates. d. strengthen the negative effects on aggregate demand of higher interest rates.

Because the United States is highly integrated with the international capital market, international capital flows tend to a. strengthen the negative effects on aggregate demand of lower interest rates. b. counteract the negative effect on aggregate demand of lower interest rates. c. counteract the positive effect on aggregate demand of higher interest rates. d. strengthen the negative effects on aggregate demand of higher interest rates.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 6SCQ: A booming economy can attract financial capital inflows, which promote further growth. However,...

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	a.	strengthen the negative effects on aggregate demand of lower interest rates.
	b.	counteract the negative effect on aggregate demand of lower interest rates.
	c.	counteract the positive effect on aggregate demand of higher interest rates.
	d.	strengthen the negative effects on aggregate demand of higher interest rates.