Suppose the Rest of the World Experiences an Expansion That

question 47

Multiple Choice

Suppose the rest of the world experiences an expansion that causes an increase in foreign income (Y*) .From the domestic economy's perspective,this increase in foreign income will cause which of the following as the domestic economy adjusts to the rise in Y*?

• A)an increase in domestic income
• B)an increase in imports
• C)an increase in net exports
• D)all of the above
• E) both A and C

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Definitions:

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated by assets minus liabilities, often used to assess if a company's stock is under or overvalued.

Fair Value

The assessed financial value of an asset or liability, reflecting current market prices in an open and competitive environment.

Significant Influence

Significant Influence is the power to participate in the financial and operating policy decisions of an investee, but not control them, typically associated with ownership of 20% to 50% of voting shares.

Database

A structured set of data held in a computer or server, accessible in various ways for efficient retrieval and management.