Question
5. The equilibrium real interest rate in Britain increases to 8 percent while the equilibrium real interest rate in Australia remains at 4 percent. As
5. The equilibrium real interest rate in Britain
increases to 8 percent while the equilibrium real
interest rate in Australia remains at 4 percent.
As a result, financial capital will flow from?
(A) Britain to Australia, increasing the interest
rate in Britain and decreasing the interest
rate in Australia
(B) Britain to Australia, decreasing the interest
rate in Britain and increasing the interest
rate in Australia
(C) Australia to Britain, increasing the interest
rate in Britain and decreasing the interest
rate in Australia
(D) Australia to Britain, decreasing the interest
rate in Britain and decreasing the interest
rate in Australia
(E) Australia to Britain, decreasing the interest
rate in Britain and increasing the interest
rate in Australia
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Introductory Econometrics A Modern Approach
Authors: Jeffrey Wooldridge
7th Edition
1337558869, 978-1337558860
