If an increase in national income has a negative effect on the trade balance, we should expect that
A) domestic interest rates will rise, attracting foreign funds
B) domestic interest rates will fall, causing an outflow of funds
C) domestic assets will become more expensive
D) the central bank will expand money supply
E) the central bank will buy foreign currency thus increasing its reserves
Correct Answer:
Verified
Q17: Which of the following items are deficit
Q18: The record of international trade in goods
Q19: If the real exchange rate is 1.80,
Q20: Which of the following is FALSE?
A)a rise
Q21: When financial investors use the forward exchange
Q23: Under flexible exchange rates and perfect capital
Q24: In a model with flexible exchange rates
Q25: As of 2013, which of the following
Q26: Expansionary monetary policy by the U.S.Fed most
Q27: If exchange rates are flexible, capital is
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents