The open-economy macroeconomic model examines the determination of
A) The output growth rate and the real interest rate.
B) Unemployment and the exchange rate.
C) The output growth rate and the inflation rate.
D) The trade balance and the exchange rate.

Question

Quizplus · Accepted Answer

The open-economy macroeconomic model focuses on the trade balance and the exchange rate, as these variables are impacted by international trade and capital flows. The model considers how changes in exchange rates affect trade, as well as how changes in the trade balance affect exchange rates. The other options listed are relevant to macroeconomic analysis but are not the primary focus of the open-economy model.

The Open-Economy Macroeconomic Model Examines the Determination of