Author Question: Crowding out, following an increase in government spending, results from (the exchange rate is the ... (Read 57 times)

KWilfred · **on:** Jun 29, 2018

Crowding out, following an increase in government spending, results from (the exchange rate is the foreign exchange price of the domestic currency)

A) higher interest rates and a lower exchange rate. B) lower interest rates and a lower exchange rate.
C) lower interest rates and a higher exchange rate. D) higher interest rates and a higher exchange rate.

Question 2

If net exports are equal to net foreign investment

A) the current account balance is equal to the negative of the financial account balance.
B) the balance of payments is zero.
C) net capital inflows are equal to imports minus exports.
D) All of the above are true when net exports are equal to net foreign investment.