In a Small Open Economy with a Flexible Exchange Rate

question 29

Multiple Choice

In a small open economy with a flexible exchange rate, a monetary injection by the Bank of Canada causes which of the following?

• A)It causes the dollar to appreciate.
• B)It causes net exports to fall.
• C)It causes an additional decrease in demand for Canadian-produced goods and services that is not realized in a closed economy.
• D)It causes a shift of the aggregate demand curve farther to the right than it would in a closed economy.

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Definitions:

Strategic Plan

A roadmap designed by an organization to outline its goals, strategies, and actions to achieve long-term success and competitive advantage.

Organizational Strategy

A long-term plan formulated by an entity to achieve specific goals and objectives, guiding its direction and allocation of resources.

Performance Standards

Benchmarks or criteria established by businesses or organizations to measure the quality and effectiveness of employee tasks and activities.

Indirect Compensation

Benefits provided by an employer that are not part of direct salary, such as health insurance, retirement plans, and paid leave.