In a Small Open Economy, Starting from a Position of Balanced

question 10

Multiple Choice

In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade ______ and ______ net capital outflow.

• A) deficit; negative
• B) surplus; positive
• C) deficit; positive
• D) surplus; negative

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Definitions:

Specialized Tools

Tools designed for specific tasks or functions, often used to improve efficiency and performance in particular applications.

Labour Costs

Expenses related to compensating employees for their work, including wages, benefits, and any associated taxes.

Equitable Pay

Compensation practices that ensure fair pay for employees based on their role, experience, and performance, regardless of gender, ethnicity, or other irrelevant factors.

Quality of Work Life

A concept that involves the enhancement of work conditions, job satisfaction, and workplace environment to improve the productivity and well-being of employees.