Author Question: In an economy open to international trade where the interest rate at which saving and investment ... (Read 61 times)

tth · **on:** Jun 30, 2018

In an economy open to international trade where the interest rate at which saving and investment would be equal is ________ the world real interest rate ________.

A) above; a trade surplus ensues
B) below; a trade deficit ensues
C) above; there is a net capital outflow
D) below; there is a net capital inflow
E) none of the above

Question 2

In the new Keynesian model, the ultimate effect on inflation of an anticipated aggregate demand shock is ________.

A) less than if that event was unanticipated
B) greater than if that event was unanticipated
C) the same as would develop if that event had never occurred
D) independent of whether or not that event is anticipated or unanticipated