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Homework answers / question archive / 1) In the open-economy macroeconomic model, if investment demand increases, then a
1) In the open-economy macroeconomic model, if investment demand increases, then
a. the supply of dollars in the market for foreign-currency exchange shifts left.
b. the supply of dollars in the market for foreign-currency exchange shifts right.
c. the demand for dollars in the market for foreign-currency exchange shifts left.
d. the demand for dollars in the market for foreign-currency exchange shifts right.
2) In an open economy the supply of loanable funds comes from
national saving. Demand comes from only domestic investment
national saving. Demand comes from domestic investment and net capital outflow.
only net capital outflow. Demand for loanable funds comes from national saving.
domestic investment and net capital outflow. Demand for loanable funds comes from national saving.
Answer:
1.
d. the demand for dollars in the market for foreign-currency exchange shifts right
2.
national savings. Demand comes from domestic investment and net capital outflow.
because savings become part of the banking systems through deposits which are lend to the borrowers.
