The Long-Run Effect of a Decline in Exports Is

question 168

Multiple Choice

The long-run effect of a decline in exports is

• A)an ambiguous change in net exports and a decline in both investment and consumption.
• B)for there to be no change in any of the aggregate expenditure categories.
• C)for net exports to decline, with no change in investment or consumption.
• D)an ambiguous change in net exports and an increase in both consumption and investment.
• E)an increase in net exports, consumption, and investment.

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Definitions:

Unlimited Liability

A legal structure in which the owners are personally liable for all the debts and liabilities of the business, without any limit.

General Partnership

A business arrangement where two or more individuals agree to share in all assets, profits, and financial and legal liabilities of a jointly-owned business.

Corporation

A legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations can enter contracts, sue and be sued, and pay taxes apart from their owners.

Secondary Market

The marketplace where investors buy and sell securities they already own, as opposed to the primary market where securities are first issued.