In a Large Open Economy

question 32

Multiple Choice

In a large open economy,

• A)domestic saving need not equal domestic investment.
• B)the domestic interest rate must equal the world interest rate.
• C)the IS curve will be steeper than in a closed economy.
• D)the IS curve will shift only if the FE curve shifts.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale at each price level.

Chocolate-Covered Peanuts

A snack consisting of peanuts coated in chocolate, blending crunchy and smooth textures.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price.

Supply Curve

A visual depiction showing the connection between a product's price and the amount available for supply.