Consider a small open economy that takes the world real interest rate as given. Suppose the world real interest rate is less than the country’s autarky real interest rate. Which of the following is TRUE? a. Domestic saving exceeds domestic investment b. There is capital outflow c. There is excess demand for capital d. None of the other options

Consider a small open economy that takes the world real interest rate as given. Suppose the world real interest rate is less than the country’s autarky real interest rate. Which of the following is TRUE? a. Domestic saving exceeds domestic investment b. There is capital outflow c. There is excess demand for capital d. None of the other options

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 12SCQ: If a country is running a government budget surplus, why is (T - G) on the left side of the...

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