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 rates 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, making option D the correct choice. While the model may touch on other macroeconomic variables such as output growth rate and inflation rate, the main focus is on the external sector including imports, exports, and the exchange rate.

What Does the Open-Economy Macroeconomic Model Examine