A few economies have the interesting characteristic that exports are more than 100 percent of the economy's GDP. How is this possible?
What will be an ideal response?
An economy's exports and imports can vary independently of the economy's GDP, so long as its exports and imports are closely linked to each other. By the national income identity, Y = C + I + G + exports - imports. Rearranging, Y - exports = C + I + G - imports. If exports > Y, then imports must be greater than C + I + G. This occurs if a sufficient portion of imports either leave the economy as exports or are intermediate goods used in the production of exports.
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Which of the following groups of people is included in the labor force of a country?
A) Part-time paid workers B) Retirees C) Disabled workers who can no longer work D) Adults who are full-time students
Effectively managing aggregate demand in order to stabilize nominal GDP requires
A) policy makers to know the size of the gap between current demand and demand at equilibrium. B) only that policy makers know what level of aggregate demand is necessary for full employment. C) successful economic forecasting. D) that nominal GDP be the same as real GDP. E) very little information about the economy because the market system is an efficient generator of high-quality information.
Since 1983, the US has typically run a financial account surplus
a. True b. False
An oligopolist has a marginal revenue curve that jumps down at 500 units of output. What kind of oligopoly does the firm most likely belong to?
A. Cournot B. Sweezy C. Bertrand D. Stackelberg