When Exports Exceed Imports, All of the Following Are True

question 50

Multiple Choice

When exports exceed imports, all of the following are true except:

• A)net capital outflows are positive.
• B)net exports are positive.
• C)domestic investment exceeds domestic saving.
• D)domestic output exceeds spending.

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Definitions:

Output Effect

The change in total output resulting from a specific economic policy or condition, such as an increase in demand.

MRP

Marginal Revenue Product, the additional revenue generated by the employment of one additional unit of a factor of production.

MPP

Marginal Physical Product, the change in total output of a good that results from a one-unit change in input, holding all other inputs constant.

Substituted

The act of replacing one good or service with another due to changes in price, preference, or other variables.