In a Large Open Economy ________

question 55

Multiple Choice

In a large open economy ________.

• A) direction of the shifts in saving and investment on the trade balance are the same as for a small open economy
• B) the direction of the shifts in saving and investment on net capital flows are the same as in a closed economy
• C) the direction of the effect on the domestic real interest rate and the actual levels of saving and investment are the same as in a small open economy
• D) all of the above
• E) none of the above

---

Definitions:

White Knight

A corporation or individual that acquires a corporation on the verge of being taken over by forces deemed undesirable by the company's board or management.

Hostile Takeover

An acquisition attempt by a company or investor to acquire another company against the wishes of the target company's management and board of directors.

Joint Venture

Typically, an agreement between firms to create a separate, co-owned entity established to pursue a joint goal.

Existing Firms

Companies or enterprises that have been established and are currently operative in the marketplace.