The open-economy macroeconomic model examines the determination of
A)the output growth rate and the real interest rate.
B)unemployment and the exchange rate.
C)the output growth rate and the inflation rate.
D)the trade balance and the exchange rate.

Question

Quizplus · Accepted Answer

The open-economy macroeconomic model focuses on how a country's trade balance (exports minus imports) and exchange rate (the price of one country's currency in terms of another) are determined and interact with each other. This model is essential for understanding the economic relationships between countries in a globalized world.

The Open-Economy Macroeconomic Model Examines the Determination of