In the Basic Model of a Small Open Economy,if the Introduction

question 67

Multiple Choice

In the basic model of a small open economy,if the introduction of automatic-teller machines reduces the demand for money,then net exports:

• A) fall and the real exchange rate falls.
• B) fall but the real exchange rate remains unchanged.
• C) remain unchanged but the real exchange rate falls.
• D) and the real exchange rate remain unchanged.

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Definitions:

Human

Referring to a member of the species Homo sapiens, characterized by the capacity for language, rationality, and complex social structures.

Market

A market is a place or system where buyers and sellers interact to exchange goods, services, or information, often determined by supply and demand.

Transactive Mode

A method of interaction where knowledge and information are exchanged among individuals through a process of communication and transaction.

Traditional Mode

Conventional or long-established ways of operating or doing something.