With Imperfect Capital Mobility, the BP Curve Slopes Upward Because

Multiple Choice

With imperfect capital mobility, the BP curve slopes upward because, starting from a Given balance-of-payments equilibrium position, a rise in national income will tend to Cause a __________, which must be counteracted by a rise in the interest rate in order to Cause a __________ that will restore BOP equilibrium.

A) BOP deficit; short-term financial capital inflow
B) BOP deficit; short-term financial capital outflow
C) BOP surplus; short-term financial capital inflow
D) BOP surplus; short-term financial capital outflow