Which of the Following Will Always Cause a Decrease in Net

question 30

Multiple Choice

Which of the following will always cause a decrease in net exports?

• A) A decrease in government spending.
• B) A decrease in imports.
• C) A decrease in investment.
• D) A decrease in the real exchange rate.
• E) An increase in domestic output.

---

Definitions:

Cost Of Goods Sold

The direct costs tied to the production of products sold by a company, including materials and labor.

Merchandise Inventory

Merchandise Inventory includes goods that are purchased and held for resale by a retail or wholesale business, representing one of the primary sources of revenue.

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, impacting the cost of goods sold and inventory valuation.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced or acquired items are the first to be expensed.