What does the open-economy macroeconomic model examine?
A)the determination of output growth rate and the real interest rate
B)the determination of unemployment and the exchange rate
C)the determination of output growth rate and the inflation rate
D)the determination of the trade balance and the exchange rate

Question

Quizplus · Accepted Answer

The open-economy macroeconomic model examines the determination of the trade balance and the exchange rate, which is reflected in choice D on the options given. It analyzes the interplay between domestic and foreign variables such as imports, exports, capital flows, and exchange rates to assess the overall economic situation in an open economy setting. While choices A, B, and C are also critical macroeconomic indicators, they are not the key focus of this model.

What Does the Open-Economy Macroeconomic Model Examine