What role do imports play in aggregate demand? Under which conditions will changes in imports expand aggregate demand? Reduce aggregate demand?
Global markets have become increasingly important not only here but abroad. A decrease in imports, other things being equal, will mean more of total purchases will be from domestic suppliers, net exports will rise and aggregate demand will also rise. An increase in imports, other things being equal, will mean fewer of total purchases will be from domestic suppliers, net exports will fall and aggregate demand will also fall.
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One important reason why the United States government is not likely to go bankrupt even with a large public debt is that it has
A. the ability to decrease interest rates and increase investment spending. B. the capacity to pay off its outstanding debt with gold. C. a strong military to protect it from creditors. D. the power to print money to finance the debt.
According to John Maynard Keynes,
A) Say's Law is always correct. B) prices and wages move up and down freely. C) effective demand determines real GDP. D) a free market economy automatically finds equilibrium at full employment. E) supply creates its own demand.
Goods can be classified on the basis of whether their consumption is
A) includable and cooperative. B) rival and excludable. C) internal and excludable. D) rival and competitive.
The term equilibrium refers to the point where:
A. quantity supplied equals quantity demanded. B. buyers and sellers "agree" on the quantity of a good they are willing to exchange at all prices. C. the supply curve and demand curve do not intersect. D. every buyer and seller achieves their best possible outcome.