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

question 51

Multiple Choice

In the monetary small open-economy model with a flexible exchange rate, an increase in the world real interest rate

• A) shifts aggregate demand to the right, increasing output and the real interest rate.
• B) shifts aggregate demand to the left, increasing output and the real interest rate.
• C) has no real effects.
• D) shifts aggregate supply to the right, increasing output and decreasing the real interest rate.
• E) shifts aggregate demand to the left, decreasing output and the real interest rate.

---

Definitions:

Shoulder Joint

A ball and socket joint that allows a wide range of movement, formed where the humerus fits into the scapula.

Anatomic Position

A reference posture with the body standing upright, arms at the sides, palms facing forward, used to describe the location of body parts.

Flexed

The position of a limb or body part that is bent, reducing the angle between the bones at a joint.

Excessive Stretching

Stretching of muscles or ligaments beyond their normal capacity, which can lead to damage or injury.