The Main Difference Between the Small Open Economy and the Large

question 80

Multiple Choice

The main difference between the small open economy and the large open economy is that

• A)the former faces a fixed international real interest rate,but the latter can influence it.
• B)the former can influence the international real interest rate,but the latter cannot.
• C)the former cannot maintain a large current account deficit,but the latter can.
• D)the former can maintain a large current account deficit,but the latter cannot.

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Definitions:

General Name

Refers to a broad designation or category that encompasses specific instances or entities.

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.

Cluster Together

The act of grouping a set of objects in such a way that objects in the same group are more similar to each other than to those in other groups.

Correlation

A statistical measure that expresses the extent to which two variables change together, indicating the strength and direction of their relationship.