What Would Be the Impact on Aggregate Demand (AD)if Exports

question 113

Multiple Choice

What would be the impact on aggregate demand (AD) if exports and imports both fell,but exports fell more than imports?

• A)AD would increase.
• B)AD could either increase or decrease.
• C)AD would be unaffected.
• D)AD would decrease.

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Definitions:

Opposing Processes

A principle in psychology that refers to the idea that every process triggers an opposite counter-process, aiming to maintain homeostasis or balance.

Balance

The state of equilibrium or equipoise; in psychology, it often refers to mental or emotional stability.

Entropy Principle

A tendency toward balance or equilibrium within the personality; the ideal is an equal distribution of psychic energy over all structures of the personality.

Psychic Energy

A Freudian concept referring to the energy generated by innate drives and instincts, which powers the mind and motivates behavior.