Question

In: Economics

In the open-economy macroeconomic model, what would make Panama’s net capital outflow decrease? a. a decrease in...

In the open-economy macroeconomic model, what would make Panama’s net capital outflow decrease?

a. a decrease in Canadian interest rates

b. a decrease in Panamanian interest rates

c. an appreciation of the Panamanian balboa

d. an increase in Panama’s net exports

21. Which of the following shifts aggregate demand to the right?

a. a decrease in the money supply

b. technological improvement that increases the profitability of capital investments

c. the repeal of an investment tax credit

d. a decrease in the price level

22. Which of the following shifts the short-run aggregate supply to the right?

a. an increase in the minimum wage

b. an increase in immigration from abroad

c. an increase in the price of oil

d. an increase in the actual price level

23. What will decrease Canadian net capital outflow?

a. capital flight from Canada

b. an increase in the government budget deficit

c. the imposition of Canadian government import quotas

d. a decrease in the tax on capital gains

Expert Solution

1 - Option C

An appreciation in the Panamanian balboa

This is because now the imports will become cheaper and the exports will become expensive. Hence the outflow will be reduced due to cheaper imports.

2 - Option D

A decrease in the price level

At the lower price in the economy , the demand for the goods and services will increase thus increase the AD.

3 - Option D

An increase in the actual price level.

When the price rise , the supply shifts to right thus indicating the increase . This is called the law of supply.

4 - Option C

Imposition of canadian government import quota

This is because due to the imposition of the import quota , the imports will reduce , thus there will be lesser outflow of capital.

Rahul Sunny answered 2 years ago

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