In a small open economy with perfect capital mobility, if the domestic interest rate were to rise above the world interest rate, then ______ would drive the domestic interest rate back to the level of the world interest rate.
A) capital inflow
B) capital outflow
C) the central bank
D) a decline in domestic saving
Correct Answer:
Verified
Q2: In the Mundell-Fleming model, the exogenous variables
Q3: If short-run equilibrium in the Mundell-Fleming model
Q4: In a small open economy with a
Q5: In the Mundell-Fleming model:
A) the exchange rate
Q6: If short-run equilibrium in the Mundell-Fleming model
Q7: Under a floating system, the exchange rate:
A)
Q8: In the Mundell-Fleming model on a Y
Q9: In a small open economy a decrease
Q10: Compared to a closed economy, an open
Q11: In the Mundell-Fleming model, the domestic interest
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