13. In the past some of the countries belonging to the Eurocurrency system times
ID: 1122222 • Letter: 1
Question
13. In the past some of the countries belonging to the Eurocurrency system times pushed for lower interest rates in unemployment problem. L have at Western Europe in order to reduce ower interest rates for the Eurcurrency countries would brobably: (a) cause a large capital outflow: (b) reduce their inflation rate due to lowening or interest cost: (c) bring the high unemployment rates ot the large continental Western dfopean countries relatively quickly down to normal times US levels. (d) none ot the 2 above..Explanation / Answer
Answer.) a.) cause a large capital outflow
A low real domestic interest rate will cause an outflow of capital to foreign markets.
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