Which of the following 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 specifically examines the determination of the trade balance (exports minus imports) and the exchange rate (the value of one currency in relation to another) in an economy that trades with other countries. Option A is related to the closed-economy macroeconomic model, while B and C are not specific to the open economy.

Which of the Following Does the Open-Economy Macroeconomic Model Examine