If a large open economy,like the United States,reduces its budget deficit,what impact would this have on a small open economy?
A) higher savings
B) increased investment
C) increased net savings
D) no change in interest rates

Question

Quizplus · Accepted Answer

A reduction in the budget deficit in a large open economy like the United States can lead to lower global interest rates, which can increase investment in small open economies due to cheaper borrowing costs.

If a Large Open Economy,like the United States,reduces Its Budget