"Net exports" rather than "exports" are included in demand/expenditures, because:
a. Actually, exports are included and not net exports because only exports are a source of demand.
b. Imports are counted in personal consumption expenditures. Therefore, net exports instead of just exports are included in aggregate demand.
c. Imported goods and services are a part of personal consumption, gross private domestic Investment, and government spending. Therefore, net exports instead of just exports are included in demand.
d. Neither exports nor net exports is included in aggregate demand.
e. None of the above.
.C
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How are most fundamental economic decisions now determined in China?
A) The government decides because China is a centrally planned economy. B) Individuals, firms, and the government interact in a market to make these economic decisions. C) The United Nations decides because China is a developing economy. D) These decisions are made by the country's elders who have had much experience in answering these questions.
If the Fed does not take into account the additional policy channels available in an open economy, then ________ when conducting contractionary monetary policy
A) it is likely to increase GDP too little and cause a recession B) it is likely to decrease GDP too little and inflation will persist C) it is likely to decrease GDP too much and cause a recession D) it is likely to increase GDP too much and inflation will persist
The demand curve for petroleum should be
A) more elastic in the long run than in the short run. B) less elastic in the long run than in the short run. C) as elastic in the long run as it is in the short run. D) more or less elastic in the long run versus the short run depending upon supply conditions.
Normative economic analysis
a. involves the study of what comprises a normal firm. b. involves how resources are actually used in an economy. c. involves judgments on how resources should be used in an economy. d. is usually thought to be a waste of time.