Building an Economic Model Based on the Assumption of a Small

Multiple Choice

Building an economic model based on the assumption of a small open economy is useful because:

A) it accurately describes the U.S. economy.
B) it is more complicated and realistic than a model based on the assumption of a large open economy.
C) this simplifying assumption can assist our understanding and intuition of open economy macroeconomics.
D) it is not possible to build models of large open economies.