In the Monetary Small Open-Economy Model with a Flexible Exchange

question 19

Multiple Choice

In the monetary small open-economy model with a flexible exchange rate, an increase in the foreign price level decreases

• A) domestic output, but has no effect on the domestic price level or the nominal exchange rate.
• B) the domestic price level, but has no effect on domestic output or the nominal exchange rate.
• C) the nominal exchange rate, but has no effect on domestic output or the domestic price level.
• D) the domestic price level and the nominal exchange rate, but has no effect on domestic output.
• E) domestic output and the price level, but has no effect on the nominal exchange rate.

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Definitions:

White Privilege

The societal privileges that benefit white people beyond what is commonly experienced by non-white people.

McIntosh

Peggy McIntosh, an American feminist and anti-racism activist, known for her work on white privilege and male privilege.

Social Structures

The complex framework of societal institutions (such as laws, the economy, and social norms) and the relationships among those institutions that determine the pattern of human interaction.

Race

A social construct used to categorize humans based on physical and ancestral characteristics, influencing identities and social positions.