In a Small Open Economy, If Exports Equal $20 Billion

question 91

Multiple Choice

In a small open economy, if exports equal $20 billion, imports equal $30 billion, and domestic national saving equals $25 billion, then net capital outflow equals:

• A) -$25 billion.
• B) -$10 billion.
• C) $10 billion.
• D) $25 billion.

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Definitions:

Capital Gains Tax

A tax on the profit realized from the sale of a non-inventory asset that was greater than the purchase price, typically stocks, bonds, precious metals, and property.

Junk Foods

Foods with low nutritional value, typically high in fats, sugars, salt, and calories.

Health Maintenance Organization

An organization that provides or arranges managed care for health insurance, self-funded healthcare benefit plans, individuals, and other entities, on a prepaid basis.

Preferred Provider Organization

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers; you pay less if you use providers that belong to the plan’s network.