In a Short-Run Model of a Large Open Economy with a Floating

question 131

Multiple Choice

In a short-run model of a large open economy with a floating exchange rate, a fiscal expansion causes an increase in:

• A) the exchange rate and a fall in net exports but has no effect on income.
• B) the money supply and an increase in income but has no effect on the exchange rate.
• C) income, the interest rate, and net exports, but a decrease in investment and in the exchange rate.
• D) income, the interest rate, and the exchange rate, but a decrease in investment and net exports.

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Definitions:

N or Participants

The total number of individuals or units involved in a study or experiment.

Groups

Collections or sets of individuals or items that are identified or classified together based on shared characteristics or purposes.

F-ratio

Used in analysis of variance, the F-ratio is a measure to assess if the variances between multiple groups are significantly different, based on averages and variability within each group.

Participants

Individuals who take part in a research study or experiment.