When Spending and Incomes in an Economy Increase

question 12

Multiple Choice

When spending and incomes in an economy increase,

• A)imports are likely to increase.
• B)imports are likely to be unchanged.
• C)imports are likely to decrease.
• D)exports are likely to decrease.

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Definitions:

Marginal Analysis

The examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Total Cost

The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

Relevant Costs

Costs directly related to a specific decision, which will change as a result of that decision.

Average Cost

The total cost of production divided by the number of goods produced, representing the cost per unit of output.