Exhibit: Saving and Investment in a Small Open Economy

question 10

Multiple Choice

Exhibit: Saving and Investment in a Small Open Economy

 
Reference: Ref 5-1
(Exhibit: Saving and Investment in a Small Open Economy) In a small open economy, if the world interest rate is r ,then the economy has:

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

---

Definitions:

Credit Policy

A set of guidelines that a company uses to determine the credit terms for its customers, including terms of payment and who is extended credit.

Exchange Rates

The price at which one currency can be exchanged for another currency in the forex market.

Creditworthiness

An assessment of a borrower's ability to repay debt as agreed, based on factors like credit history, income level, and current debt levels.

Canadian Dollar Appreciates

An increase in the value of the Canadian dollar relative to another currency.