A Small Open Economy Reduces Its Desired Saving

question 92

Multiple Choice

A small open economy reduces its desired saving.This causes the world real interest rate to ________ and the country's current account balance to ________

• A)fall; fall
• B)remain unchanged; rise
• C)fall; rise
• D)remain unchanged; fall

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Definitions:

Separating Equilibrium

A concept in game theory where different types of players choose distinct strategies, allowing them to be distinguished based on their choices.

Dull Lectures

Lectures that are uninteresting or boring, often perceived as monotonous and lacking in engaging content.

Equilibrium

A situation in a market or model where supply equals demand, and there is no incentive for change.

Lemons

A term used in economics to refer to products of significantly lower quality that cannot be easily distinguished from higher quality products before purchase.