Solved

For an International Capital Flow Shock in Which Foreign Investors

Question 2

Multiple Choice

For an international capital flow shock in which foreign investors lose confidence in a country:


A) the country's real domestic product is affected if the country has a fixed exchange rate but is not affected if the country has a floating exchange rate.
B) the country's real GDP decreases regardless of whether the country has a fixed or floating exchange rate, but the country's real GDP declines less if the country has a floating exchange rate.
C) the country's real domestic product is affected if the country has a floating exchange rate but not affected if the country has a fixed exchange rate.
D) the country's real GDP tends to decline if the country has fixed exchange rate, but the country's real GDP tends to increase if the country has a floating exchange rate.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents