A decrease in net exports
A. causes an increase in imports of the same size.
B. causes GDP to decrease.
C. causes GDP to increase.
D. can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable.
Answer: B
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Regarding fiscal policy, the new classical economists
a. are in favor of stability. b. attempt to avoid excessive and inflationary stimulus. c. want to avoid erratic government deficit spending. d. All of the above e. None of the above
Which of the following is true about the indifference curve where one commodity (such as pollution) is "bad"?
A) It has a negative slope. B) It has a positive slope. C) It is horizontal. D) It is vertical.
When a U.S. importer needs $22,000 to settle an invoice for 25,520 Swiss francs, the exchange rate must be:
a. 1 Swiss franc = $1.16. b. 1 Swiss franc = $0.16. c. 1 Swiss franc = $0.84. d. $1 = 1.16 Swiss franc. e. $1 = 1.84 Swiss franc.
To obtain GDP from a national income base,
a. add indirect business taxes and Social Security taxes b. add capital depreciation and Social Security taxes c. add indirect business taxes and personal taxes d. subtract indirect business taxes and capital depreciation e. add indirect business taxes and capital depreciation