When Variable Net Exports Are Added to the Aggregate Expenditure

question 5

Multiple Choice

When variable net exports are added to the aggregate expenditure line, the resulting planned aggregate expenditure line becomes

• A)steeper because net exports increase as real domestic income increases
• B)flatter because net exports increase as real domestic income increases
• C)steeper because net exports decrease as real domestic income increases
• D)flatter because net exports decrease as real domestic income increases
• E)flatter because imports decrease as real domestic income increases

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Definitions:

Indenture

A formal legal agreement, contract, or document between two parties, especially one detailing the terms and conditions of a bond or debenture.

Debenture

A type of debt instrument that is not secured by physical assets or collateral but is backed only by the general creditworthiness and reputation of the issuer.

Mortgage Bond

A bond secured by real estate.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate. It is a static value determined at the time of issuance.