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If the Foreign Exchange Market Is in Equilibrium and Attractive

Question 28

Multiple Choice

If the foreign exchange market is in equilibrium and attractive domestic investment opportunities result in a net inflow of capital,


A) the nation will experience a trade deficit.
B) the nation will experience a trade surplus.
C) interest rates will rise in the loanable funds market.
D) the actual rate of unemployment must exceed the natural rate of unemployment.

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