We Will Generally Observe That the More Open an Economy

question 25

Multiple Choice

We will generally observe that the more open an economy:

• A) the larger the effect of fiscal policy on output and the smaller the effect of fiscal policy on the trade position.
• B) the smaller the effect of fiscal policy on output and the smaller the effect of fiscal policy on the trade position.
• C) the smaller the effect of fiscal policy on output and the larger the effect of fiscal policy on the trade position.
• D) the effect of fiscal policy on output and the trade position is ambiguous.
• E) the larger the effect of fiscal policy on output and the larger the effect of fiscal policy on the trade position.

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Definitions:

Trough Levels

The lowest concentration of a drug in the bloodstream, typically measured to ensure therapeutic levels are maintained without reaching toxic levels.

Onset of Action

The time it takes after a drug is administered for it to produce its therapeutic effect.

Duration

The length of time that something lasts or continues.

Physiological Response

The natural, biological reactions of the body to internal or external stimuli, such as heart rate increase in response to stress or exercise.