A Decrease in the Real Interest Rate in the U

question 1

Multiple Choice

A decrease in the real interest rate in the U.S. will cause net exports to:

• A) increase because exports will remain constant but imports will decrease.
• B) decrease because exports will decrease and imports will increase.
• C) decrease because exports will increase but imports will increase.
• D) increase because exports will increase and imports will decrease.

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Definitions:

Taxes

Mandatory monetary levies enforced by a government on people or organizations to support public spending.

Price

The amount of money expected, required, or given in exchange for something else.

Gallons

A unit of volume measurement used primarily in the United States for liquids, equal to 3.785 liters.

Economic Questions

Fundamental questions addressing how an economy decides on what to produce, how to produce it, and for whom to produce, reflecting allocation of resources.