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:

Operating Income

Earnings from a company’s core business operations, excluding deductions for interest and taxes.

Variable Costs

Costs that fluctuate in direct proportion to changes in levels of production or sales volumes.

Fixed Costs

Financial obligations like rent, wages, and insurance that are stable and do not vary with the level of goods manufactured or sold.

Break-even

The point at which total revenues equal total costs, resulting in neither profit nor loss for the business.