Multiple Choice
Which of the following is most likely to happen if the demand for money decreases in the domestic economy under floating exchange rates and free capital mobility?
A) The domestic interest rate will increase.
B) Domestic borrowing will decline.
C) The financial account of the country's balance of payments will deteriorate.
D) The average price level in the domestic economy will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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