The Net Export Component of Aggregate Demand of Australia Will

question 34

Multiple Choice

The net export component of aggregate demand of Australia will increase if:

• A) GDP and income in Australia increase
• B) GDP and income in China increase
• C) household expenditure in American Samoa increases
• D) household expenditure in Australia increases

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Definitions:

Highly Elastic

Describes a situation where demand for a product is highly sensitive to changes in price, leading to significant changes in quantity demanded.

Highly Inelastic

A situation in which demand or supply changes very little in response to large changes in price, often applicable to essential or unique goods and services.

Herfindahl Index

An economic indicator used to measure the size of companies in relation to the industry and the level of competition among them.