When Net Exports Are Included in the Aggregate Expenditure Function

question 32

Multiple Choice

When net exports are included in the aggregate expenditure function, the spending multiplier

• A)increases
• B)decreases
• C)is affected only if exports are greater than imports
• D)is affected only if exports are less than imports
• E)is affected only if exports are equal to imports

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Definitions:

Catalog List Price

The official selling price of a product as listed in a catalog, before any discounts or promotions are applied.

Credit Terms

The conditions under which a seller extends credit to a buyer, including payment deadlines, interest rates, and discounts for early payments.

Invoice Discount

A reduction in the billed price granted to customers, often used as an incentive for early payment.

Credit Terms

The agreement between a buyer and a seller that outlines the payment terms for goods or services, including the due date and any interest or penalties for late payment.