24.In the short-run open economy model, an increase in foreign income will result in:  A. A decrease in domestic output  B. An increase in domestic output  C. No change in domestic output  D. A decrease in domestic interest rates

In a classical open economy model, what happens if domestic saving increases while investment remains constant?A.The trade balance will turn into a trade surplusB.Domestic interest rates will riseC.The real exchange rate will riseD.The trade balance will turn into a trade deficit

Suppose the government of a very large open economy implements a contractionary fiscal policy. Which of the following statements or graphs correctly indicate the long-run economic impact of the foreign fiscal policy on a small open economy according to the classical model?Note: This is a multiple-answer question; thus, more than one option may be correct.a.Domestic output decreases.b.Domestic output remains unchanged.c.d.

Suppose the government of a small open economy reduces social welfare benefits. Which of the following statements or graphs correctly indicate the long-run economic impact of the fiscal policy change on the small open economy according to the classical model?Note: This is a multiple-answer question; thus, more than one option may be correct.a.b.c.Domestic output increases.d.Domestic output remains unchanged

In the short-run (specific-factors) model, foreign direct investment is expected to ________ the marginal product of labor and ________ wages in the receiving country.Question 6Answera.decrease; decreaseb.decrease; increasec.increase; increased.increase; decrease

onsider an open economy with fixed exchange rates. (a) With the aid of the IS-LM diagram, show the effects of a domestic fiscal expansion on domestic output and domestic interest rate