In the Open-Economy Macroeconomic Model,equilibrium Is Determined by the Equality

question 173

Multiple Choice

In the open-economy macroeconomic model,equilibrium is determined by the equality between the supply of dollars which comes from

• A)U.S.national saving and the demand for dollars for U.S.net exports.
• B)U.S.net capital outflow and the demand for dollars for U.S.net exports.
• C)domestic investment and the demand for U.S.net exports.
• D)foreign demand for U.S.goods and U.S.demand for foreign goods.

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Definitions:

Monetary Policy

The process by which a central bank controls the supply of money in the economy, primarily through interest rates.

Federal Reserve District Banks

The 12 regional banks in the Federal Reserve System, each serving a specific geographic area of the United States, responsible for implementing the country's monetary policies.

Recessions

A phase of limited economic decrease, with trade and industry activity lowering, usually identified by a decrease in GDP in two adjacent quarters.

Federal Reserve Notes

Paper money issued by the Federal Reserve, the central banking system of the United States, used as the country's standard currency.