An Increase in Autonomous Investment in a Small Open Economy

question 65

Multiple Choice

An increase in autonomous investment in a small open economy will cause ________.

• A)a trade surplus to shrink
• B)a trade deficit to shrink
• C)higher net capital outflows
• D)all of the above
• E)none of the above

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Definitions:

Null Hypothesis

A statement in hypothesis testing that proposes no significant difference or effect, serving as the default assumption to be tested against.

Probability

A measure quantifying the likelihood that certain events will occur.

Null Hypothesis

Re-phrased: The presumption in statistical testing that asserts no association or effect among studied variables.

Critical Value

A threshold in hypothesis testing that defines the boundary beyond which an observed test statistic is considered statistically significant.