Equilibrium in an Open Economy Is Characterized by

question 15

Multiple Choice

Equilibrium in an open economy is characterized by

• A) Net exports = net capital outflow.
• B) Net exports + net capital outflow = savings.
• C) Domestic investment + net capital outflow = savings.
• D) Both a and c are correct.

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Definitions:

Russia

Russia is the largest country in the world by area, spanning Eastern Europe and northern Asia, with a rich history, diverse culture, and significant global political and economic influence.

Yugoslavia

A country that existed in Southeast Europe during most of the 20th century, comprising several Slavic ethnic groups and dissolved in a series of wars in the 1990s.

Trade Balance

The gap between what a country sells to and buys from other countries in terms of goods and services.

Merchandise

Goods that are bought and sold in commerce, particularly those related to retail trade.