Using the standard 45° line diagram, how does a decrease in net exports effect the expenditure schedule?
A. It increases the slope of the expenditure schedule.
B. It decreases the slope of the expenditure schedule.
C. It shifts the expenditure schedule upward.
D. It shifts the expenditure schedule downward.
Answer: D
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In 1981 Fed policy created a severe recession because the Fed
A) publicly announced an inflation increase program. B) undertook an unexpected increase in the inflation rate. C) undertook an unexpected reduction in the inflation rate. D) publicly announced an inflation reduction program. E) increased aggregate supply to reduce the inflation rate.
If a firm is maximizing its profit and producing less than the output at which its average total cost is minimized, then that firm
A) must be suffering an economic loss. B) must be earning an economic profit. C) has excess capacity. D) is producing at its capacity output. E) must be earning a normal profit.
Average product equals the
A) increase in output that results from a one-unit increase in the quantity of labor employed with all other inputs remaining the same. B) total amount of output produced. C) total amount of output produced divided by the quantity of labor employed. D) total amount of output produced divided by price of the output.
If Egypt can produce 3 silver candlesticks or 120 small silver cups in an hour and Turkey can produce 4 silver candlesticks or 160 small silver cups in an hour then
a. neither country would gain by trading b. the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce silver cups. c. the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce silver cups. d. the terms of trade or 40 silver cups per one silver candlestick and Egypt should only produce candlesticks. e. the terms of trade or 40 silver cups per one silver candlestick and Turkey should only produce candlesticks.