Identify the correct statement about net exports.
What will be an ideal response?
The value of net exports increases as real domestic income decreases.
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If the quantity of credit supplied in a market exceeds the quantity of credit demanded in the market:
A) the unemployment rate tends to rise. B) the real rate of interest tends to rise. C) the rate of inflation tends to fall. D) the real rate of interest tends to fall.
Individuals A and B both produce good X. A has a comparative advantage in the production of good X if A
A) has a lower opportunity cost of producing good X than has B. B) has a lower opportunity cost of producing good X than of producing good Y. C) can produce more units of X in a given time period than can B. D) can produce X using newer technology than can B.
Loanable funds refers to
A) only those funds loaned from one bank to another. B) only those funds loaned to banks by the Federal Reserve. C) only those funds loaned by banks to private individuals. D) all those funds changing hands between lenders and borrowers in the bond market.
Trade between countries tends to
a. reduce both competition and specialization. b. reduce competition and increase specialization. c. increase competition and reduce specialization. d. increase both competition and specialization.