In a Small Open Economy, Starting from a Position of Balanced

question 102

Multiple Choice

In a small open economy, starting from a position of balanced trade, if the government increases the income tax, this produces a tendency toward a trade ______ and ______ net capital outflow.

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

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Definitions:

Dispositional Attribution

The tendency to attribute people's behaviors to their inherent traits, personality, or dispositions rather than to external factors.

Situational Attribution

The process of attributing behavior to external factors or circumstances beyond the control of the individual.

Cues

Signals or stimuli in the environment that are used to guide behavior and decision-making.

Barrier

Any obstacle or impediment that prevents progress or makes achieving goals more difficult.