Question

Difference between small open economy and large open economy

Answer 1

Answer:

In a small open economy, investment (capital) flows in and out of a country freely at a fixed world interest rate. In the large open economy model the interest rate r is largely a function of the domestic economy and central bank monetary policies. ... They also have a choice between domestic and foreign investments.

Answer 2

Answer:

Difference between small open economy and large open economy

Explanation:

• In a small open financial system, funding (capital) flows inside and out of a rustic freely at a hard and fast international interest rate. within the big open financial system model the hobby price r is essentially a feature of the home economy and principal financial institution financial regulations.
• A small open economy, abbreviated to SOE, is an economic system that participates in worldwide alternate, however is small enough compared to its buying and selling companions that its rules do now not regulate world charges, hobby fees, or earning. as a consequence, the nations with small open economies are rate takers.

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