If Ford Sells 200 Explorers for a Total of $400,000

question 124

Multiple Choice

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany,

• A) U.S. GDP decreases because net exports are negative.
• B) U.S. GDP increases because it sells more Explorers.
• C) Germany's GDP decreases.
• D) U.S. net exports is positive.

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Definitions:

Utility

Refers to the total satisfaction received from consuming a good or service.

Consuming

The act of using goods and services to satisfy needs or wants.

Maximizing Utility

The process of choosing the most satisfying option among available choices based on preferences and constraints.

Marginal Utility

The augmented utility or contentment a person obtains by consuming an extra unit of a good or service.