According to the Open-Economy Macroeconomic Model, Which of the Following

question 17

Multiple Choice

According to the open-economy macroeconomic model, which of the following would NOT be a consequence of an increase in the Canadian government budget deficit?

• A)Canadian trade balance rises.
• B)Canadian net capital outflow falls.
• C)Canadian investment abroad decreases.
• D)The real exchange rate of the Canadian dollar appreciates.

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Definitions:

Northwest Territory

A historical region in the United States that encompassed land west of Pennsylvania, north of the Ohio River, and east of the Mississippi River, designated for future expansion.

Sovereign Nation

A politically independent state or country recognized by other nations, having full control over its own territory and government without external influence.

Barbary Leaders

The rulers of the Barbary States in North Africa, known in the early modern period for their engagement in piracy and slave trade, impacting European and American shipping.

Pirating

The unauthorized use, reproduction, or distribution of copyrighted or patented material.