When Determining the AE Function for an Open Economy with Government

question 1

Multiple Choice

When determining the AE function for an open economy with government, it is generally assumed that as real national income

• A)increases, imports will decrease.
• B)decreases, exports will decrease.
• C)decreases, net exports will decrease.
• D)increases, exports will decrease.
• E)increases, net exports will decrease.

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Definitions:

Fastest Growing Households

Households that are increasing in number or size at a rate faster than other types, often due to specific social, economic, or demographic trends.

Cohabitors

Individuals who live together in a romantic relationship without being legally married.

Singles

Individuals who are not married, in a civil partnership, or in a cohabiting relationship, often highlighting their state of being unmarried.

One-Parent Families

Households led by a single parent raising one or more children, due to various circumstances such as divorce, death, or single adoption.