Question

In an open economy the slope of the AD curve is the same for the case...

In an open economy the slope of the AD curve is the same for the case of no capital mobility and perfect capital mobility.

Is true or false. Explain, please

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Answer #1

Answer:- In an open economy the slope of the AD curve is the same for the case of no capital mobility and perfect capital mobility.

Correct Answer:- False

Reason:-

There will be no restriction or roadblocks in the capital mobility in case of an open economy. Depending upon different economic circumstances, the capital mobility can come in to picture.

                As the aggregate demand of both the open economy and closed economy is different, thus the slope of aggregate demand curve will also be different for both the open economy and closed economy which has no capital mobility or perfect capital mobility.Therefore the statement is false.

                I REQUEST YOU TO KINDLY RATE THE ANSWER AS THUMBS UP. THANKS, A LOT.

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