Building an Economic Model Based on the Assumption of a Small

question 73

Multiple Choice

Building an economic model based on the assumption of a small open economy is useful because:

• A) it accurately describes the U.S. economy.
• B) it is more complicated and realistic than a model based on the assumption of a large open economy.
• C) this simplifying assumption can assist our understanding and intuition of open economy macroeconomics.
• D) it is not possible to build models of large open economies.

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Definitions:

Perceptions

The way in which something is regarded, understood, or interpreted, influenced by individual experience and biases.

Evaluative Tendency

The predisposition of a person to judge something as good or bad in a consistent manner over time.

Specific Object

An identifiable entity distinguished by particular characteristics.

Attitudes Function

The role that attitudes play in influencing how we respond to people, objects, and situations.