In the open-economy model, which of the following economic variables is taken as given?

Question

In the open-economy model, which of the following economic variables is taken as given?

I. Real gross domestic product (GDP)

II. Real exchange rates

III. Price level

IV. Real interest rate

Answer 1

real exchange rate and price

Answer 2

I. Real gross domestic product (GDP)

But 'Real exchange rate' is function of difference in price levels, monetary policy and market structure.

Real interest rate - formally equalized evenly though also depends on financial market structure and business-cycle stage

Answer 3

III. Price level