If Foreign Income Falls, We Can Expect to See All

question 63

Multiple Choice

If foreign income falls, we can expect to see all of the following, except:

• A)a decrease in foreign spending.
• B)a rise in domestic aggregate demand.
• C)no change in either domestic net exports or aggregate demand.
• D)a decrease in domestic net exports.
• E)a decrease in domestic aggregate demand.

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Definitions:

Traveler's Checks

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Credit Cards

Financial instruments that allow users to borrow funds from a pre-approved limit to pay for goods and services, with the expectation of paying back the borrowed amount along with any applicable interest.

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a decision to pursue a particular action.

Holding Money

The act of keeping money in cash or in accounts as savings rather than investing it.