Suppose the Rest of the World Experiences a Recession That

question 27

Multiple Choice

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

• A)a reduction in income and a reduction in imports
• B)a reduction in imports and an increase in net exports
• C)the NX line to shift up
• D)an ambiguous effect on net exports

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Definitions:

Northern American

Referring to the geographic region that includes the United States and Canada, often considered in cultural, economic, or political analysis.

Social Psychological Research

An area of study focusing on how thought, behavior, and feelings are influenced by the implied, imagined, or actual presence of others.

Generalize

To make broad statements or conclusions based on a limited set of observations or experiences, extending findings beyond the original context.

College Student Population

A specific demographic focused on individuals enrolled in college or university.