Exhibit: Saving and Investment in a Small Open Economy

question 45

Multiple Choice

Exhibit: Saving and Investment in a Small Open Economy In a small open economy, if the world interest rate is r₁, then the economy has:

• A)a trade surplus.
• B)balanced trade.
• C)a trade deficit.
• D)negative capital outflows.

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Definitions:

Routing Number

A unique nine-digit code used to identify a banking institution in the United States, essential for processing electronic transfers and checks.

Internal Control

A system of policies and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Employees Rotated

A process where employees are moved between different jobs or tasks to gain experience, reduce monotony, or improve workforce flexibility.

Monthly Bank Statements

Detailed financial statements provided by banks, summarizing account activity, balances, and other financial transactions for each month.