Which of the following are the main elements of our open-economy macroeconomic model?
A)the market for loanable funds, the foreign-currency market, and the price level
B)the market for goods and services, the price level, and GDP
C)the market for goods and services, net capital outflow, and GDP
D)the market for loanable funds, net capital outflow, and the foreign-currency market

Question

Quizplus · Accepted Answer

The open-economy macroeconomic model includes the market for loanable funds, net capital outflow, and the foreign-currency market. These elements together help to analyze the flow of funds between domestic and foreign economies, which affects exchange rates, interest rates, and ultimately economic growth. Thus, option D is the correct answer. Option A only includes two of the three elements, and option B only includes the market for goods and services, which is not sufficient for analyzing an open economy. Option C includes net capital outflow but does not include the foreign-currency market, which is also necessary for analyzing an open economy.

Which of the Following Are the Main Elements of Our