In a Small Open Economy with a Flexible Exchange Rate

question 77

Multiple Choice

In a small open economy with a flexible exchange rate, what does a monetary injection by the Bank of Canada cause?

• A) the dollar to depreciate
• B) net exports to fall
• C) an additional decrease in demand for Canadian-produced goods that is not realized in a closed economy
• D) a shift of the aggregate demand curve to the right but less than in a closed economy

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Definitions:

Relationship-oriented

A focus on building and maintaining strong interpersonal connections within an organization.

Task-oriented

Focusing primarily on completing tasks efficiently and effectively, usually with specific goals and processes in mind.

LPC

The Least Preferred Co-worker scale, a tool used in Fiedler's contingency model to determine an individual's leadership style based on how they view the least favorable person to work with.

Directive Behaviour

Refers to a leadership style where instructions, orders, and expectations are clearly communicated by leaders to their subordinates.