Which of the Following Is True Concerning the Impact of Net

question 19

Multiple Choice

Which of the following is true concerning the impact of net exports in the model with AE = C + I + NX + G?

• A)Net exports are a leakage from the economy if imports exceed exports.
• B)Net exports are always positive.
• C)Net exports are negative because exports are assumed to be autonomous.
• D)Net exports must be negative if planned investment is positive.
• E)Net exports are an injection into the economy if imports equal exports.

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Definitions:

Accounts Receivable

Money owed to a business by its clients for goods or services delivered but not yet paid for.

Bad Debts

Amounts owed to a company that are not expected to be received, often due to the debtor being unable to pay. These are often written off as an expense.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity, as reported in the cash flow statement.