Multiple Choice
Suppose the world economy is divided into two halves.In Region A,all economies experience a decrease in desired saving,while desired saving is unchanged in Region B.If there is open trade and perfect capital mobility across the two regions,which of the following is true?
A) Actual investment in Region B has increased.
B) There is a net capital flow from Region B to Region A.
C) Actual investment in Region A has increased.
D) all of the above
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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