In explaining the downward-sloping aggregate demand curve, the net export effect is:
a. When a nation's price index falls, international capital flows are attracted to it, which causes the net exports to rise.
b. When the price index falls, net exports fall because a nation's exports become relatively cheaper and its imports become relatively more expensive.
c. When the price index falls, the real money supply rises, causing the real risk-free interest rate to fall, and consumption and real investment to rise.
d. When the price index falls, net exports rise because a nation's exports become relatively cheaper and its imports become relatively more expensive.
e. When the price index falls, central banks intervene to bring prices back to where they were, causing net exports to rise.
.D
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Refer to Figure 2-13. Which two arrows in the diagram depict the following transaction: Stanley purchases the novel, "Night of Sorrows" for his summer reading pleasure
A) J and M B) K and M C) K and G D) J and G
Refer to the above figures. If a positive externality that existed becomes corrected, price and quantity will become
A) P1 and Q1. B) P2 and Q2. C) P3 and Q3. D) P4 and Q4.
It is perfectly legitimate for the United States to pass laws requiring that all food products or cars sold in the United States meet certain safety standards approved by the United States government as long as they have some ___________ basis.
a. environmental b. scientific c. political d. subjective
The fact that severe fluctuations in inflation and unemployment are socially undesirable helps make the case for
a. a "hands off" policy by the government. b. fixed prices and wages. c. active government stabilization policy. d. restrictions on imports from low wage countries.