Suppose the government of a large open economy reduces its spending, so that national saving increases. The result is
A) a decrease in the foreign country's net exports.
B) an increase in the real interest rate.
C) an increase in the foreign country's net exports.
D) a decrease in investment.
A
You might also like to view...
An increase in the price of jet fuel will ________ airline travel and the equilibrium quantity of airline travel will ________
A) decrease the supply of; decrease B) increase the demand for; increase C) decrease the supply of; increase D) decrease the demand for; decrease
In determining the exchange rate between the Canadian dollar and British pound, if Canadian income increases, then
a. the Canadian demand for pounds increases b. the price of pounds decreases c. the Canadian demand for pounds decreases d. the Canadian supply of pounds increases e. the supply of Canadian dollars decreases
If a country's imports are very important in determining the volume of exports from its trading partners, then:
a. the simple spending multiplier understates the true value of the multiplier. b. the spending multiplier will be equal to 1/marginal propensity to import. c. the simple spending multiplier is an accurate measure of the multiplier effect. d. the simple spending multiplier will be equal to 1/MPC e. the spending multiplier will be equal to 1/marginal propensity to save.
Technological improvement (e.g., better capital equipment) will result in a leftward shift of the marginal revenue product of labor
Indicate whether the statement is true or false