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

question 106

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 exports.
• D) lowers the real exchange rate.

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Definitions:

Sociological Imagination

The ability to see the link between individual circumstances and larger social structures, coined by sociologist C. Wright Mills.

Historical Forces

Broad, powerful factors that shape societies and historical events over time, including economic conditions, political movements, and social change.

Colonialism

A policy or practice by which a powerful country directly controls less powerful countries and exploits them economically, defining much of global history and resulting in lasting socio-political and economic impacts.

Racial Groups

Categories of humans based on shared physical or social qualities into groups generally viewed as distinct by society. The criteria for such grouping can be controversial and vary widely.