UNIT 06 / OPEN ECONOMY—INTERNATIONAL TRADE AND FINANCE

Real Interest Rates and International Capital Flows6.6 test

100 questions with explanations after each answer.

Practice mode

QUESTION 01 / 100Easy

If Country A has a higher real interest rate than Country B, which of the following will most likely occur, all else equal?

Select one answerAFinancial capital will flow from Country A toward Country BBFinancial capital will flow from Country B toward Country ACFinancial capital will remain in each country because only nominal rates matterDFinancial capital will flow equally in both directions regardless of the rate differenceEFinancial capital will move toward the country with the lower real interest rate

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1 of 100

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Question 1