According to the Open-Economy Macroeconomic Model, an Increase in the Canadian

question 95

True/False

According to the open-economy macroeconomic model, an increase in the Canadian government budget surplus increases Canadian net capital outflow, causes the real exchange rate of the dollar to depreciate, and increases Canadian net exports.

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Definitions:

Pareto Optimal Allocations

Situations where no reallocation can make someone better off without making someone else worse off in an economy.

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources or the outcome of trade between two parties.

Utility Function

An economic tool that describes how consumers rank different bundles of goods according to the level of satisfaction or utility those bundles provide.

Endowed

Provided with a large amount of a particular resource or quality.