Net Exports, in General, Are

question 25

Multiple Choice

Net exports, in general, are

• A) positively correlated with the real exchange rate.
• B) positively correlated with real income.
• C) positively correlated with the domestic price index.
• D) negatively correlated with the price index of the rest of the world.
• E) none of the above.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing to sell, holding other factors constant.

Interest Rates

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Loanable Funds Theory

An economic theory that suggests the market interest rate and the quantity of loanable funds are determined by the demand and supply of credit.

Interest Rates

The cost of borrowing money or the return on investments, usually expressed as a percentage.