In a Small Open Economy, If Exports Equal $15 Billion

question 89

Multiple Choice

In a small open economy, if exports equal $15 billion and imports equal $8 billion, then there is a trade ______ and ______ net capital outflow.

• A) deficit; negative
• B) surplus; negative
• C) deficit; positive
• D) surplus; positive

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Definitions:

MRP Curve

The Marginal Revenue Product curve, which depicts the additional revenue generated by employing an additional unit of a resource or factor of production.

Demand

A schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time.

Price

The amount of money expected, required, or given in payment for something.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital.