Figure 24-1 -Refer to Figure 24-1. Ceteris Paribus, a Decrease in the Decrease

question 120

Multiple Choice

Figure 24-1
-Refer to Figure 24-1. Ceteris paribus, a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would result in U.S. exports increasing faster than U.S. imports. This would be represented by a movement from

• A) AD₁ to AD₂.
• B) AD₂ to AD₁.
• C) point A to point B.
• D) point B to point A.

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Definitions:

Matching Principle

An accounting rule that dictates expenses should be recorded in the same period as the revenues they helped to generate.