A Reduction in Net Exports Will, All Other Things Unchanged

question 61

True/False

A reduction in net exports will, all other things unchanged, shift the aggregate demand curve to the left.

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Definitions:

Constant Returns to Scale

A situation in economics where increasing the inputs in production proportionately increases the output.

Constant Returns to Scale

The situation where an increase in all inputs by a certain factor leads to an increase in output by the same factor, showing linear scalability in production.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output expands, often due to inefficiencies that arise from becoming too large.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.