Suppose There Is an Increase in Exports

question 99

Multiple Choice

Suppose there is an increase in exports. Assuming the price level is held constant, which one of the following best describes the sequence of changes in the economy?

• A)Autonomous expenditure increases, induced expenditure increases, real GDP increases, and the price level rises.
• B)Induced expenditure increases, autonomous expenditure increases, real GDP increases, and consumption increases.
• C)Induced expenditure increases, real GDP increases, autonomous expenditure increases, and the price level increases, lowering autonomous expenditure and real GDP increases by a smaller amount.
• D)Induced expenditure increases, real GDP increases, autonomous expenditure increases, real GDP increases more, autonomous expenditure increases again, etc.
• E)Autonomous expenditure increases, real GDP increases, induced expenditure increases, real GDP increases more, induced expenditure increases again, and the process continues until equilibrium expenditure is reached.

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Definitions:

Class Consciousness

A term that refers to the awareness of one's social class and the interests and struggles associated with it, often discussed in the context of worker solidarity and political action.

Lower Classes

A term referring to the socioeconomic group characterized by lower income, limited access to education and economic opportunities, often performing manual labor or service jobs.

Sacred

Considered holy or deserving veneration, often associated with divinity, religious practices, or objects imbued with spiritual significance.

Profane

Anything regarded as not sacred or religious; everyday, mundane objects or activities without spiritual significance.