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THE NEXT FOUR (4) QUESTIONS ARE BASED ON THE FOLLLOWING INFORMATION: Panel (a) Panel (b) Real Real Interest Exchange Rate Rate World Interest Rate D
THE NEXT FOUR (4) QUESTIONS ARE BASED ON THE FOLLLOWING INFORMATION: Panel (a) Panel (b) Real Real Interest Exchange Rate Rate World Interest Rate D Q1 Q2 Quantity of Q3 Quantity of Loanable Funds Loanable Funds10. In panel (a), the demand curve represents: (1) domestic interest rate. (2) demand for Canadian dollars to purchase Canadian exports of goods and services. 3) net capital outflow. (4) domestic investment demand. 11. In panel (a), the supply curve represents: (1) national saving. (2) only public saving. (3) only private saving. (4) the supply of Canadian dollars in the foreign-currency exchange market. 12. In panel (b), the equilibrium value of net exports is: (1) given by Q3. (2) given by E1. (3) equal to the value of net capital outflow. (4) both Options (1) and (3). 13. In panel (b), E1 is: (1) the price of foreign goods and services relative to domestic goods and services. (2) the price of domestic goods and services relative to foreign goods and services. (3) the price of goods and services in the future relative to goods and services in the present. (4) the price of goods and services in the present relative to goods and services in the future. If Canada removes an import quota on wheat, Canadian exports will Canadian net exports will , and Canadian net capital outflow will (1) increase; increase; be unaffected (2) increase; be unaffected; be unaffected (3) increase; increase; decrease (4) be unaffected; be unaffected; increase
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