Question

In: Economics

4. If a country increases the amount of goods it imports but its exports remain unchanged:...

4. If a country increases the amount of goods it imports but its exports remain unchanged:

	A.	AD would not shift.
	B.	AD shifts right.
	C.	AD shifts left.
	D.	AD would shift but in a random direction.

7. Rising confidence in the economy shifts the aggregate demand curve to the left.

	A.	False
	B.	True

8. An increase in net export spending will result in a(n):

	A.	increase in aggregate supply.
	B.	decrease in aggregate supply.
	C.	increase in aggregate demand.
	D.	decrease in aggregate demand.

12. The decline in aggregate demand that occurred during the Great Depression caused a drop in real GDP:

	A.	but a modest rise in inflation.
	B.	and deflation.
	C.	but no change in the price level.
	D.	but an increase in the price level.

Expert Solution

1.

The answer is C.

AD shifts left.

Increase in imports but not exports would decrease net exports ie NX

AD=C+I+G+NX

Assuming no change in other variables,this will reduce AD and AD would shift left.

2.

The answer is FALSE

An increase in consumer confidence will shift the AD curve to the right.

3.

The answer is C.

increase in aggregate demand.

AD=C+I+G+NX

Assuming no change in other variables,this will increase AD and AD would shift right.

4.

The answer is B.

and deflation.

The decline in aggregate demand that occurred during the Great Depression caused a drop in real GDP and falling prices level.

Rahul Sunny answered 2 years ago

A small country imports industrial goods and exports agricultural goods. Both industry and agriculture are perfectly competitive.

A small country imports industrial goods and exports agricultural goods. Both industry and agriculture are perfectly competitive. A new minimum wage law raises wages in industry but not in agriculture. However, all workers displaced from industry as a result of the new, higher wage find employment in agriculture. Is an import tax on industrial goods the best way to deal with any resulting problems? Why (not)?USE OF APPROPRIATE DIAGRAMS TO ANSWER EACH QUESTION IS ENCOURAGED.

If a corporate bond’s default risk increases, its credit spread will most likely: Decrease. remain unchanged....

If a corporate bond’s default risk increases, its credit spread will most likely: Decrease. remain unchanged. increase.

"If the price of a commodity increases the quantity demanded can increase, decrease, or remain unchanged."...

"If the price of a commodity increases the quantity demanded can increase, decrease, or remain unchanged." While seemingly contradictory, each of these two statements is correct when placed in the proper context. Carefully demonstrate and explain the proper context for each of these statements.

Nigeria faces the price elasticities of demand for its imports and exports of -.4 and -.3,...

Nigeria faces the price elasticities of demand for its imports and exports of -.4 and -.3, respectively. Analyze how its current account will be influenced by a devaluation of the naira by 10%. If policy makers wish to have an improvement of the current account, what should they do?

Usually, when the supply of loanable funds increases, then interest rates: Select one: a. Remain unchanged....

Usually, when the supply of loanable funds increases, then interest rates: Select one: a. Remain unchanged. b. Increase. c. Might increase or decrease. d. Decrease. Outward oriented policies have adverse effect on economic growth. Select one: a. Fales. b. True. Human capital refers to society’s understanding of the best ways to produce goods and services. Select one: a. Fales. b. True. If country A produces 6,000 units of goods and services using 600 hours of labor, and country B produces...

Suppose we refused to sell goods to any country that reduced or halted its exports to...

Suppose we refused to sell goods to any country that reduced or halted its exports to us. Who would benefit and who would lose from such retaliation? Can you suggest alternative ways to ensure import supplies? Are there any particular imported commodities that you or your firm rely on? What has happened to the supply of these imports over the years?

3. Factors that influence international trade In the 1950s, imports and exports of goods and services...

3. Factors that influence international trade In the 1950s, imports and exports of goods and services constituted roughly 4% to 5% of U.S. GDP. In recent years, exports have accounted for approximately 12% of GDP, while imports have more than tripled to over 15% of GDP. Which of the following help to explain the increase in international trade and finance since the 1950s? Check all that apply. International trade agreements such as the North American Free Trade Agreement (NAFTA) Higher...

If the value of a nation’s imports exceeds the value of its exports, which of the...

If the value of a nation’s imports exceeds the value of its exports, which of the following is NOT true? a. Net exports are negative. b. GDP is less than the sum of consumption, investment, and government purchases. c. Domestic investment is greater than national saving. d. The nation is experiencing a net outflow of capital.

Let us assume the situation like in the lecture; the home country exports cloth and imports...

Let us assume the situation like in the lecture; the home country exports cloth and imports food. Please explain with graph(s)what will happen, if the relative price of food increases? Particularly, derive A What will happen with the slope of the iso-value line? B What will happen with the production quantities in the home country (Will more or less food produced and will more or less cloth produced) ? Why? C What will happen with the terms of trade of...

If the United States imports more goods from abroad than it exports, then foreigners will tend...

If the United States imports more goods from abroad than it exports, then foreigners will tend to have a surplus of US dollars. What will this do to the value of the dollar with respect to foreign currencies? What is the corresponding effect on foreign investments in the United States?