In a Small Open Economy, If the Introduction of Automatic

question 41

Multiple Choice

In a small open economy, if the introduction of automatic teller machines reduces the demand for money, then net exports:

• A)fall, and the real exchange rate falls.
• B)fall, but the real exchange rate remains unchanged.
• C)remain unchanged, but the real exchange rate falls.
• D)increase, and the real exchange rate remains unchanged.

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Definitions:

Export Industries

Sectors of a country's economy that produce goods or services for sale to foreign countries.

Licensing Agreement

A legal contract whereby one party (the licensor) allows another party (the licensee) to use its intellectual property, brand, or product under specified conditions.

Global Business

The conduction of trade, production, or services across national borders, involving the planning and execution of transactions on an international scale.

Transborder Entrepreneurship

Involves creating and managing business ventures that operate across national borders, leveraging global market opportunities.