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In an Open Economy,a Decrease in Net Exports Because of Reduced

Question 96

Multiple Choice

In an open economy,a decrease in net exports because of reduced demand for domestic products by foreigners should cause the domestic real interest rate to ________ and should cause desired saving minus desired investment to ________.


A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall

Correct Answer:

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