Other Things Equal, an Increase in an Economy's Exports Will

question 122

Multiple Choice

Other things equal, an increase in an economy's exports will

• A) lower the marginal propensity to import.
• B) have no effect on domestic GDP because imports will change by an offsetting amount.
• C) decrease its domestic aggregate expenditures and therefore decrease its equilibrium GDP.
• D) increase its domestic aggregate expenditures and therefore increase its equilibrium GDP.

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Definitions:

Dominance

A situation in social, ecological, or other forms of hierarchies where one entity exercises control or influence over others.

Rational Psychological Process

The mental operations grounded in logic and reason, which are involved in making decisions or solving problems.

Appraisal

The act of assessing the value, quality, or nature of something, often for the purpose of making a decision.

To-Be-Chosen Option

An alternative or choice that has been identified but not yet selected.