A Small Open Economy Is in Long-Run Equilibrium; It Has

question 81

Multiple Choice

A small open economy is in long-run equilibrium; it has some foreign debt outstanding; and its interest rate exceeds its growth rate.
I: The country has a trade surplus.
II: The world interest rate exceeds the country's growth rate.

• A) I is true; II is not.
• B) II is true; I is not.
• C) Both I and II are true.
• D) Neither I nor II is true.

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Definitions:

Maslow

A psychologist best known for developing Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs.

Doubts

Feelings of uncertainty or lack of conviction about something, often involving questions about belief or decision making.

D-motivation

The reduction or loss of motivation, often due to a lack of rewards or the presence of demotivating factors.

Self-actualizers

Individuals who have realized and fulfilled their potential in terms of personal growth, creativity, and understanding, according to Maslow's hierarchy of needs.