In a Small Open Economy, If the Government Adopts a Policy

question 32

Multiple Choice

In a small open economy, if the government adopts a policy that lowers imports, then the quantity of exports:

• A) remains unchanged.
• B) decreases but not as much as the quantity of imports decreases.
• C) decreases by exactly the same amount as the quantity of imports decreases.
• D) decreases by more than the quantity of imports decreases.

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Definitions:

Commercial Impracticability

A doctrine under contract law where a party is excused from performing their contractual duties because unforeseen events have made performance excessively burdensome or impracticable.

Excuse Performance

A legal doctrine that allows a party to be released from a contractual obligation when events beyond their control prevent them from performing.

Rejection Is Ineffective

A legal principle indicating that simply refusing or rejecting an offer or contract does not nullify or void its terms or its potential effects.

Notifies The Seller

The act of informing the seller about relevant information or decisions, typically in a commercial transaction.