In a Small Open Economy, If Consumers Shift Their Preference

question 93

Multiple Choice

In a small open economy, if consumers shift their preference toward Japanese cars, then net exports:

• A) fall and the real exchange rate falls.
• B) fall but the real exchange rate remains unchanged.
• C) remain unchanged but the real exchange rate falls.
• D) and the real exchange rate remains unchanged.

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Definitions:

Layoffs

The act of temporarily or permanently removing employees from their positions, often due to economic downturns, restructuring, or other financial pressures on an organization.

Consequential Ethics

An ethical theory that evaluates the morality of actions based on their outcomes or consequences.

Workforce Diversity

Refers to the inclusion of individuals from various backgrounds and demographics within a workplace, contributing to a richer variety of experiences, viewpoints, and skills.

Uncertainty Avoidance

A cultural dimension that describes the extent to which people within a culture are made nervous by situations they perceive as unstructured, unclear, or unpredictable.