A Shift in a Nation's Offer Curve Toward the Axis

question 3

Multiple Choice

A shift in a nation's offer curve toward the axis measuring the exportable commodity tends to ____________ trade at constant prices,and __________ the nation's terms of trade.

• A) expand, improve
• B) expand, decrease
• C) decrease, improve
• D) decrease, decrease

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Definitions:

Savings

Money set aside for future use rather than spending immediately, often in accounts designed for long-term growth or security.

Disposable Income

Post-tax income households possess for saving or spending purposes.

Disposable Income

Disposable income refers to the sum of money that families can use for expenditures and savings once income taxes are deducted.

MPS (Marginal Propensity to Save)

The proportion of an increase in income that an individual or population saves rather than spends on consumption.