In the Two-Period SOE Model with Production, If the SOE

question 22

Multiple Choice

In the two-period SOE model with production, if the SOE closes off trade with the rest of the world,

• A) this must make output go down.
• B) this must make investment go up.
• C) this makes output go up if the real interest rate goes up.
• D) this makes output go up if the real interest rate goes down.
• E) this makes output go up only if the government reduces spending.

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Definitions:

Cone

(1) In botany, a reproductive structure in many gymnosperms that produces either microspores or megaspores. (2) In zoology, one of the conical photoreceptive cells of the retina that is particularly sensitive to bright light and, by distinguishing light of various wavelengths, mediates color vision. Compare with rod.

Compound Eye

A type of eye found in some arthropods, consisting of multiple small visual units that provide a wide field of vision and the ability to detect movement.

Camera Eye

A type of eye found in vertebrates and some mollusks that is characterized by a spherical lens that focuses light on the retina, producing a detailed image.

Ocelli Eye

Simple eyes, or ocelli, are found in some invertebrates, consisting of photoreceptor cells to detect light intensity and direction, but not form detailed images.