Assume That a $1

question 33

Multiple Choice

Assume that a $1.00 increase in exports increases GDP by $3.00, and a $1.00 increase in income increases import spending by $0.15. In this case, a $1,000 million increase in exports will increase net exports by

• A) $550 million.
• B) $700 million.
• C) $1,000 million.
• D) $1,350 million.

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Definitions:

Cross-border Trade

Involves the exchange of goods or services between entities in different countries, navigating various regulations and market conditions.

Tariffs

Taxes imposed on imported goods to regulate trade, protect domestic industries, or generate revenue for the government.

Imports

are goods and services brought into one country from another for trade or sale.

Foreign Direct Investment

Investment made by a company or individual in one country in business interests in another country, in the form of establishing business operations or acquiring business assets.