An increase in the real interest rate outside of the United States will cause net capital outflows to ________ and cause the dollar to ________ relative to other currencies.
A) increase; appreciate
B) increase; depreciate
C) decrease; appreciate
D) decrease; depreciate
Question 2
Capital per person k is higher in Japan than in the United States. As a result ________.
A) per capita income is higher in Japan
B) total factor productivity is higher in Japan
C) the marginal product of capital is higher in Japan
D) all of the above
E) none of the above
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