A Permanent Reduction in Net Exports Leads to

question 66

Multiple Choice

A permanent reduction in net exports leads to

• A) a more than proportional decrease in real Gross Domestic Product (GDP).
• B) a less than proportional decrease in real Gross Domestic Product (GDP).
• C) a proportional increase in real Gross Domestic Product (GDP).
• D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).

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Definitions:

The Economist

A weekly magazine focusing on global news, politics, economics, business, and finance.

Commodity Prices

The prices of basic goods that are typically used as inputs in the production of other goods and services, such as metals, agricultural products, and energy sources.

Resource Consumption

The use of resources, such as raw materials, energy, and labor, in the production of goods and services.

Productivity

The measure of output produced per unit of input used, indicating the efficiency and effectiveness of economic activity or production processes.