Figure 32-5 Refer to This Diagram of the Open-Economy Macroeconomic Model to Model

question 198

Multiple Choice

Figure 32-5
Refer to this diagram of the open-economy macroeconomic model to answer the questions below.



-Refer to Figure 32-5. In the market for foreign-currency exchange, the effects of an increase in the budget surplus can be illustrated as a move from j to

• A)g.
• B)h.
• C)i.
• D)k.

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Definitions:

Negative Externalities

Costs that are suffered by a third party as a result of an economic transaction that they were not directly involved in.

Opt Out

The choice made by individuals to not participate in a program, activity, or to forego a service, often involving a default option or requirement.

High Costs

Refers to situations where the expenses associated with production, maintenance, or other operations are significantly above the average.

Negative Externalities

Costs not incurred by consumers or producers but by a third party or the environment, as a result of an economic activity.