Expansionary Fiscal Policy Leads to an Increase in Net Exports

question 139

True/False

Expansionary fiscal policy leads to an increase in net exports, all other things unchanged.

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Definitions:

Implicit Costs

The opportunity costs of using resources that a business already owns, representing the potential income lost in employing them in a specific task.

Forgone Income

Income not earned due to choosing an alternative action, such as studying full-time instead of working.

Total Costs

The total of all costs associated with the creation of goods or services, which encompasses both constant and fluctuating expenses.

Marginal Cost

The change in total cost that results from producing one additional unit of a good or service, a key concept in economic decision-making and pricing strategies.