If Net Exports Are Positive

question 63

Multiple Choice

If net exports are positive,

• A) the equilibrium GDP must be greater than the full-employment GDP.
• B) imports must exceed exports.
• C) aggregate expenditures are greater at each level of GDP than when net exports are zero or negative.
• D) some other component of aggregate expenditures must be negative.

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Definitions:

Economy

Economy encompasses the system by which goods and services are produced, distributed, and consumed within a society, influenced by governmental, cultural, and environmental factors.

Goods and Services

The tangible products (goods) and intangible items (services) that are produced and provided to meet the needs and wants of consumers.

Market Economy

An economic system in which supply and demand drive the production and distribution of goods and services, with minimal government intervention.

Specialization

Focus on a narrow area of expertise or production to increase efficiency and output.