By Itself, an Increase in Exports

question 235

Multiple Choice

By itself, an increase in exports

• A) can either increase or decrease GDP, depending on whether the exports are durable or nondurable.
• B) means imports decrease by the same amount.
• C) decreases GDP.
• D) increases GDP.

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Definitions:

Centrally Planned Economies

Economic systems where all production, investment, prices, and incomes are determined by the government or a central authority.

Invisible Hand

A metaphor introduced by Adam Smith to describe how individuals' pursuit of self-interest can lead to societal benefits through the efficient allocation of resources.

Public Interests

The concerns, values, or benefits that are regarded as important by the general public and are taken into account in social or political decision-making.

Competition

The rivalry among businesses to sell their goods and services to consumers, which can drive innovation and keep prices low.