In the Small Open Economy in Equilibrium

question 41

Multiple Choice

In the small open economy in equilibrium:

• A) saving is fixed, and investment is determined by the investment function and the world interest rate.
• B) investment is fixed, and saving is determined by the saving function and the world interest rate.
• C) saving is fixed, and investment is determined by the trade balance.
• D) investment is fixed, and saving is determined by the trade balance.

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Definitions:

Intangible Benefits

Non-quantifiable advantages provided by goods or services, such as brand reputation or employee satisfaction.

Discount Rate

The rate used within discounted cash flow assessments to ascertain the present-day value of anticipated cash flows.

Net Present Value

A calculation that determines the value of a series of future cash flows in today's dollars, taking into account the time value of money.

Automated Equipment

Equipment that operates with minimal human intervention, using technology to perform tasks that would otherwise require manual effort.