small open economies - 2024 ACF Winter at UBC

Question

The Mundell–Fleming trilemma illustrates the trade-offs faced by idealized countries described this term. For 10 points each:

[10h] Give this three-word term that describes certain countries, depending on their total output and level of trade, whose interest rates are determined entirely by international capital markets.

ANSWER: small open economies [or SOE, reject partial answers]

[10e] Policymakers within small open economies may intentionally lower this value to increase exports in a policy known as depreciation. This value is the proportion at which one currency can be converted into another.

ANSWER: exchange rate

[10m] Because small open economies are price-takers of interest rates, their assets face this sort of demand. This demand curve is represented by a horizontal line on a supply-and-demand graph.

ANSWER: perfectly elastic demand [or infinitely elastic demand; prompt on elastic demand]

Back to bonuses

Summary


2024 ACF Winter at Clemson	2024-11-16	Y	1	20.00	100%	100%	0%
2024 ACF Winter at Lehigh	2024-11-16	Y	6	15.00	100%	50%	0%
2024 ACF Winter at Northwestern	2024-11-16	Y	9	14.44	100%	44%	0%
2024 ACF Winter at Ohio State	2024-11-16	Y	7	11.43	100%	14%	0%
2024 ACF Winter at Online	2024-11-16	Y	8	10.00	88%	13%	0%
2024 ACF Winter at UBC	2024-11-16	Y	3	13.33	100%	33%	0%
2024 ACF Winter at Central Florida	2024-11-16	Y	5	12.00	100%	20%	0%
2024 ACF Winter at Brandeis	2024-11-16	Y	8	15.00	100%	50%	0%

Data


Alberta	SFU	10	0	10
UBC B	UBC A	10	10	20
UW B	UW A	10	0	10