A Small Country Is a Net Foreign Borrower If Its

question 143

Multiple Choice

A small country is a net foreign borrower if its real interest rate without foreign borrowing is ________ the world real interest rate.

• A) higher than
• B) equal to
• C) lower than
• D) not comparable to

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Definitions:

Free Trade

An economic policy that allows for the unrestricted import and export of goods among countries without the imposition of tariffs, quotas, or other restrictions.

Tariffs and Quotas

Government-imposed taxes on imported goods (tariffs) and limits on the quantity of goods that can be imported (quotas) to protect domestic industries from foreign competition.

Favoured Nations

A policy or clause in an agreement ensuring that a country or party receives treatment at least as favorable as that given to any other country or party.

Tariffs

Taxes governments levy on imports from abroad.