In a Small Open Economy, If Domestic Saving Exceeds Domestic

question 50

Multiple Choice

In a small open economy, if domestic saving exceeds domestic investment, then the extra saving will be used to:

• A) make loans to the domestic government.
• B) make loans to foreigners.
• C) repay the national debt.
• D) repay loans to the Federal Reserve.

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Definitions:

Foolish Conformity

The act of adopting behaviors or beliefs uncritically or irrationally, often to align with a group's norms or expectations.

Affiliation Needs

The human need to form and maintain strong, stable interpersonal relationships and social connections.

Safety

The state of being safe from or not prone to causing harm, risk, or damage.

Psychological Need

An inherent requirement for psychological well-being, including needs for affiliation, achievement, autonomy, and self-esteem.