The Relationship Between Net Exports and GDP Makes the Slope

question 71

Multiple Choice

The relationship between net exports and GDP makes the slope of the aggregate expenditure curve

• A)steeper at low levels of GDP and flatter at high levels of GDP.
• B)flatter than it would be otherwise.
• C)neither flatter nor steeper than it would be otherwise.
• D)steeper than it would be otherwise.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, used in international trade and investment.

Natural Rate

Refers to the long-term unemployment rate or interest rate that is observed once the effect of short-term cyclical factors has been removed.

Aggregate Demand

The entirety of demand for goods and services in an economic setting, pegged at an established price level and during a defined time.

Unemployment Rate

The percentage of the workforce currently without jobs and actively searching for employment.