An increase in domestic demand will have which of the following effects in an open economy?
A) a smaller effect on output than in a closed economy and a positive effect on the trade balance
B) a smaller effect on output than in a closed economy and a negative effect on the trade balance
C) a larger effect on output than in a closed economy and a positive effect on the trade balance
D) a larger effect on output than in a closed economy and a negative effect on the trade balance
A
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In this market, economists would call a government-set maximum price of $40 a:
A. price ceiling.
B. price floor.
C. equilibrium price.
D. fair price.
Refer to the data. The price elasticity of demand is relatively inelastic:
Answer the question on the basis of the following demand schedule:
A. in the $6-$4 price range.
B. over the entire $6-$1 price range.
C. in the $3-$1 price range.
D. in the $6-$5 price range only.