In a Small Open Economy,the Real Interest Rate Will Always

question 97

Multiple Choice

In a small open economy,the real interest rate will always be

• A)above the world real interest rate.
• B)below the world real interest rate.
• C)equal to the world real interest rate.
• D)independent of the world real interest rate.

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Definitions:

Scientific Method

A systematic and empirical approach to research, involving the collection of data, formulation and testing of hypotheses, and the development of theories.

Unbiased Development

The equitable and impartial progress in economic, social, and environmental aspects without favoritism.

Theories

Systematically organized knowledge applicable in a relatively wide variety of circumstances, especially a system of assumptions, accepted principles, and rules of procedure devised to analyze, predict, or otherwise explain the nature or behavior of a specific set of phenomena.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to use resources in one way rather than another.