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In a small open economy, if the world interest rate is r1, then the economy has: Group of answer choices

User Recluze
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1 Answer

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Answer:

The remaining part of the question is:

1. domestic spending is greater than output.

2. saving is greater than investment.

3. net capital outflows are positive.

4. imports are less than exports.

Correct Answer:

1. domestic spending is greater than output.

Step-by-step explanation:

This is because, since the open economy is small, the world interest rate would lead to the domestic spending becoming greater than the output.

User Mkingston
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