In a Two-Good,two-Period Model with Trade,an Increase in the World

question 47

Multiple Choice

In a two-good,two-period model with trade,an increase in the world real interest rate

• A) increases domestic output and increases the current account surplus.
• B) increases domestic output and decreases the current account surplus.
• C) decreases domestic output and increases the current account surplus.
• D) decreases domestic output and decreases the current account surplus.
• E) increase aggregate consumption and have no effect on the current account surplus.

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Definitions:

Mean Difference

The average of differences between pairs of observations in a dataset.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance.

Paired T-test

A statistical test used to compare the means of two related groups to determine if there is a significant difference between them.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true; a measure of the risk of a Type I error.