How are net exports and the government sector balance linked?
What will be an ideal response?
Net exports is the value of exports of goods and services minus the value of imports of goods and services. Net exports is equal to the sum of government sector surplus or deficit plus the private sector surplus or deficit. The government sector balance is equal to net taxes minus government expenditure on goods and services. If the government sector balance is negative, then the government sector has a deficit, that is, a budget deficit. Because net exports equals the sum of the government sector balance plus private sector balance, if the government budget deficit increases and the private sector balance does not change, the value of net exports becomes more negative.
You might also like to view...
A type of ________ problem that occurs when a person or institution has multiple objectives that conflict with each other is called ________
A) moral hazard; conflicts of interest B) adverse selection; conflicts of interest C) moral hazard; spinning D) adverse selection; spinning
The Clayton Antitrust Act
a. was opposed by labor unions. b. defended monopolies. c. outlawed price discrimination. d. never went into effect.
If the government knew the precise values of the multiplier and potential income, fine-tuning the economy would:
A. be more difficult. B. be possible. C. be much easier, but mistakes would still occur occasionally. D. still be very difficult.
Performance compensation that is tied to outcomes out of the employees' control will provide employees with the incentive to work hard.
Answer the following statement true (T) or false (F)