Assume That a Small Open Economy Gets Involved in a Global

question 99

Multiple Choice

Assume that a small open economy gets involved in a global war,in which its government purchases increase and the rest of the world's government purchases also increase.Then,for the basic model of the small country,net exports:

• A) will certainly decrease.
• B) will certainly increase.
• C) may increase or decrease.
• D) will remain the same.

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Definitions:

Mental Activity

The operation of the mind through processes like thinking, learning, memory, perception, and problem-solving.

Goods

Tangible items that are produced, bought, or sold, serving as objects of commerce and economic transactions.

Services

Activities or functions that are provided by individuals or organizations to fulfill the needs or wants of others.

Offshoring

Sending work or jobs to another country to cut a company’s costs at home (sometimes called international outsourcing and offshore outsourcing).