Answer:
The answer is smaller, less
Explanation:
Definition of terms:
Open economy is an economy that does not restrict itself to only domestic economy but rather trade freely with other economies of the world.
Contractionary fiscal policy is used by the government of a country to slow down the economy. Here, government either increases tax or cut its spending.
So a contractionary fiscal policy in an open economy will have a SMALLER impact on aggregate demand because increase in trade with other economies will neutralize this policy and will be LESS effective in slowing down the economy.
