In an open economy with a given level of real interest rates and risk, a decrease in real interest rates abroad will _____ capital inflows and _____ the equilibrium domestic real interest rate.Group of answer choicesincrease; increasedecrease; increaseincrease; not changeincrease; decrease

Consider a small open economy that takes the world real interest rate as given. Suppose that initially the world real interest rate is less than the country’s autarky real interest rate. Now suppose there is a change in tax policy that leads to an increase in domestic investment demand. Which of the following is TRUE?Group of answer choicesThe economy may flip from importing capital to exporting capitalThere is an increase in the quantity of domestic savingThere is an increase in the real interest rate paid by domestic investorsNone of the other options

Consider a small open economy that takes the world real interest rate as given. Suppose the world real interest rate is less than the country’s autarky real interest rate. Which of the following is TRUE?Group of answer choicesDomestic saving exceeds domestic investmentThere is capital outflowThere is excess demand for capitalNone of the other options

Consider a small open economy that does not permit international borrowing or lending. The country’s autarky real interest rate is greater than the world real interest rate. Suppose the country removes its capital controls. Which of the following is TRUE?Group of answer choicesThere is an excess demand for capital in the domestic economy and capital flows inThere is an excess demand for capital in the domestic economy and capital flows outThere is an excess supply of capital in the domestic economy and capital flows inThere is an excess supply of capital in the domestic economy and capital flows out

Suppose that in a small open economy with perfect capital mobility and a floating exchange rate, the central bank increases the money supply because the economy is in a recession. This will cause the equilibrium income to _____ and the equilibrium exchange rate to _____.decrease; risedecrease; fallincrease; fallincrease; rise

Suppose country A is a small open economy with free capital flows and a fixed exchange rate system, which of the statement is ture?A.With expansionary fiscal policy, country A's income  increases.B.With expansionary fiscal policy, country A's income  decreases.C.With expansionary fiscal policy, country A's exchange rate  increases.D.With expansionary fiscal policy, country A's exchange rate  decreases.