In the open-economy macroeconomic model, if a country's supply of loanable funds shifts right, then O A. net capital outflow rises, so the real exchange rate rises. O B. net capital outflow falls, so the real exchange rate rises. O C. net capital outflow rises, so the real exchange rate falls. O D. net capital outflow falls, so the real exchange rate falls.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: A Macroeconomic Theory Of The Open Economy
Section: Chapter Questions
Problem 1CQQ
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46.

In the open-economy macroeconomic model, if a country's supply of loanable
funds shifts right, then
O A. net capital outflow rises, so the real exchange rate rises.
B. net capital outflow falls, so the real exchange rate rises.
O C. net capital outflow rises, so the real exchange rate falls.
O D. net capital outflow falls, so the real exchange rate falls.
Transcribed Image Text:In the open-economy macroeconomic model, if a country's supply of loanable funds shifts right, then O A. net capital outflow rises, so the real exchange rate rises. B. net capital outflow falls, so the real exchange rate rises. O C. net capital outflow rises, so the real exchange rate falls. O D. net capital outflow falls, so the real exchange rate falls.
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