Which of the following is true of exports and imports?
a. Both imports and exports are added to a nation's gross domestic product (GDP)
b. Both imports and exports are subtracted from a nation's gross domestic product (GDP).
c. Imports are added and exports are subtracted from a nation's gross domestic product (GDP).
d. Exports are added and imports are subtracted from a nation's gross domestic product (GDP).
e. Neither imports nor exports are included in a nation's gross domestic product (GDP).
c
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Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets
By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that A) people are rational. B) people respond to economic incentives. C) optimal decisions are made at the margin. D) equity is more important than efficiency.
Suppose the U.S. economy is producing at the natural rate of output. An appreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
(Assume the appreciation causes no effects in the supply side of the economy.) A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
An expansion occurs when ________, when ________, or when both of these occur.
A. potential output grows rapidly; actual output rises above potential output. B. potential output grows slowly; actual output equals potential output C. potential output grows slowly; actual output rises above potential output D. potential output grows rapidly; actual output equals potential output
When the consumer spends a small portion of his income on a good, demand will be
A. elastic. B. unit-elastic. C. inelastic. D. elastic, unit-elastic or inelastic depending upon supply.