In a Small Open Economy, If the World Real Interest

question 16

Multiple Choice

In a small open economy, if the world real interest rate is above the rate at which national saving equals domestic investment, then there will be a trade ______ and ______ net capital outflow.

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

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Definitions:

Kondo

The main hall, or Golden Hall, of a Japanese Buddhist temple, which houses the principal images and statues for worship.

Yakushi Triad

A central figure in Japanese Buddhist iconography, Yakushi Nyorai, flanked by two attendants, symbolizing healing and medicine.

Korea

A country in East Asia, known for its rich history, culture, and division into North and South Korea in the 20th century.

China

A country in East Asia, known for its long history, vast territory, and significant influence on culture and philosophy worldwide.