For a small open economy with free capital mobility, an increase in the world real interest ratewoulddecrease net exports.increase net exports.increase the current account balance.decrease the current account balance.

The term "capital mobility" describes how easily financial resources, such as cash or investments,…

For a small open economy with free capital mobility, an increase in the world real interest rate would OC decrease net exports. increase net exports. increase the current account balance. decrease the current account balance.

For a small open economy with free capital mobility, an increase in the world real interest rate would OC decrease net exports. increase net exports. increase the current account balance. decrease the current account balance.

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 6SCQ: The GDP for the United States is 18,036 billion and its current account balance is 484 billion. What...

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Question

For a small open economy with free capital mobility, an increase in the world real interest rate
would
decrease net exports.
increase net exports.
increase the current account balance.
decrease the current account balance.

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