The Relationship Between Net Exports and GDP Makes the Slope

question 227

Multiple Choice

The relationship between net exports and GDP makes the slope of the aggregate expenditure curve

• A) steeper at low levels of GDP and flatter at high levels of GDP.
• B) steeper than it would be otherwise.
• C) neither flatter nor steeper than it would be otherwise.
• D) flatter than it would be otherwise.

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Definitions:

Capital Goods

Physical assets such as machinery and buildings used by businesses to produce goods and services over time.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, indicating an improvement in the country's economic health.

Resource Allocation

The process of distributing available resources among various competing needs or uses in order to achieve desired objectives.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for any given quantity produced of another good, given the resources and technology available.