As the Import Share of GDP Increases Relative to the Export

question 165

True/False

As the import share of GDP increases relative to the export share of GDP, the sum of the consumption, investment, and government shares of GDP will decline.

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Definitions:

Cash

Money in the form of notes and coins, representing immediate purchasing power and liquidity.

Bank Vaults

Secure rooms where banks and other financial institutions store money, valuable documents, and other assets.

Fed

Short for the Federal Reserve, the central banking system of the United States, which regulates the U.S. monetary and financial system.

Open Market

An economic system with no barriers to free market activities, where securities, goods, and services can be traded openly.