In a Small Open Economy, If the Government Adopts a Policy

question 41

Multiple Choice

In a small open economy, if the government adopts a policy that lowers imports, then that policy:

• A)raises the real exchange rate and increases net exports.
• B)raises the real exchange rate and does not change net exports.
• C)raises the real exchange rate and decreases net
• D)exports. lowers the real exchange rate.

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Definitions:

Autonomic Nervous System

A component of the peripheral nervous system responsible for regulating automatic bodily activities such as cardiac rhythm, digestive processes, and breathing rate.

Piloerection

The involuntary erection of hairs on the skin, typically as a response to cold or fear, creating what is commonly known as "goosebumps."

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring.

Evolutionary Roots

The origin or development of a trait, behavior, or species as explained by the principles of evolution.