Multiple Choice
If the risk of buying U.S.assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds,then
A) net capital outflow and the real exchange rate will rise.
B) net capital outflow will rise and the real exchange rate will fall.
C) net capital outflow will fall and the real exchange rate will rise.
D) net capital outflow and the exchange rate will fall.
Correct Answer:
Verified
Correct Answer:
Verified
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