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

question 127

Multiple Choice

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

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

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Definitions:

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its earning capacity.

Discounted Payback Method

A capital budgeting approach that calculates the time required to recoup the cost of an investment, considering the time value of money.

Internal Rate of Return (IRR)

The interest rate that results in a net present value of zero for all cash flows associated with a specific project.

Net Present Value (NPV)

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time. It is used to assess the profitability of an investment.