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Macroeconomics

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Effects of an Expected Drop in Future Productivity

MACRO-2RLIZG

In a closed economy, if the expected future level of technology rises, then…

A

the domestic interest rate falls and the current account deteriorates.

B

the domestic interest rate falls and the current account remains unchanged.

C

the domestic interest rate falls and the current account improves.

D

the domestic interest rate remains unchanged and the current account deteriorates.

E

the domestic interest rate remains unchanged and the current account improves.

F

the domestic interest rate rises and the current account deteriorates.

G

the domestic interest rate rises and the current account remains unchanged.

H

the domestic interest rate rises and the current account improves.