Adding Net Exports to Aggregate Expenditure Always

question 28

Multiple Choice

Adding net exports to aggregate expenditure always

• A)increases real GDP
• B)shifts the aggregate expenditure line down
• C)increases the slope of the aggregate expenditure line
• D)decreases the slope of the aggregate expenditure line
• E)decreases GDP

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Definitions:

Efficient Market

A type of market where all relevant information is rapidly and correctly reflected in securities prices, allowing them to be bought and sold at their fair value.

Systematic Risk

Market or sector-wide risk, commonly called market risk, that remains despite attempts at diversification.

Unsystematic Risk

The risk associated with a specific company or industry, which can be reduced through diversification, unlike systematic risk which affects the entire market.

Portfolio Diversification

A strategy for managing risk that involves diversifying a portfolio with a broad range of investments to reduce the effect of the performance of any individual asset.