If Net Exports Increases, but Neither Government Expenditure nor Net

question 412

True/False

If net exports increases, but neither government expenditure nor net taxes change, saving must increase.

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Definitions:

After-tax Earnings

The net income a company generates after all taxes have been deducted from total revenue.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which is used to finance its overall operations and growth.

Residual Dividend Policy

A strategy where dividends are paid after all project capital needs and working capital requirements are met.

Dividend Payout Ratio

The percentage of net income paid to shareholders in the form of dividends.