International Trade Tends to Lower the Value of the Multiplier

question 1

Multiple Choice

International trade tends to lower the value of the multiplier because

• A)imports fall as GDP increases.
• B)net exports fall as GDP increases.
• C)net exports tend to rise as GDP increases.
• D)exports fall as GDP increases.

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Definitions:

Prime Rate

The interest rate that banks offer to their most credit-worthy customers, often used as a benchmark for other loans or credit products.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulating banks, and ensuring financial system stability.

High-Quality Corporations

Companies known for their strong financial health, stability, product quality, and reliable customer service.

National Debt

The total amount of money that a country's government has borrowed, by various means.