Consider the implications of capital mobility. Which of the
following is the most likely effect of continued low US interest rates?
Inflows of foreign capital seeking the higher growth of the American economy.
Foreign governments will engage in competitive interest rate lowering.
US stock prices will increase.
Outflows of American capital seeking the higher returns available in other countries.
Inflows of foreign capital seeking the higher growth of the American economy.
Foreign governments will engage in competitive interest rate lowering.
US stock prices will increase.
Outflows of American capital seeking the higher returns available in other countries.
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