All Else Equal,an Increase in Net Exports Accompanied by a Decrease

question 68

Multiple Choice

All else equal,an increase in net exports accompanied by a decrease in expected future profits would definitely result in

• A) an increase in the equilibrium real interest rate.
• B) a decrease in the equilibrium real interest rate.
• C) an increase in the equilibrium level of saving and investment.
• D) a decrease in the equilibrium level of saving and investment.

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Definitions:

Beginning Inventory

The inventory value ready for sale at the onset of an accounting cycle.

Reported Net Income

The profit or loss of a company after all expenses have been deducted from revenues, as presented in financial statements.

Accrued Payroll Liabilities

Obligations for salaries and wages that have been incurred but not yet paid to employees.

Retained Earnings

The portion of net income that is not distributed as dividends to shareholders, but retained by the company for reinvestment in its operations.