In a Small Open Economy with a Floating Exchange Rate

question 6

Multiple Choice

In a small open economy with a floating exchange rate, an effective policy to decrease equilibrium output is to:

• A) decrease government spending.
• B) decrease taxes.
• C) increase the money supply.
• D) decrease the money supply.

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Definitions:

Spending Habits

Patterns or behaviors regarding how individuals use their money, often reflecting their values, financial goals, or economic status.

Essential-Trait

A core characteristic believed to represent the most important attributes of an individual's personality.

Lengthy Personality Measure

A comprehensive assessment tool used to evaluate a wide range of personality traits and behaviors over an extended set of items or questions.

Many-Trait

An approach in personality psychology focusing on the correlation between a wide range of traits and specific behaviors.