When Determining the AE Function for an Open Economy with Government,it

question 38

Multiple Choice

When determining the AE function for an open economy with government,it is generally assumed that as real national income

• A)increases,exports will decrease.
• B)increases,net exports will decrease.
• C)increases,imports will decrease.
• D)decreases,net exports will decrease.
• E)decreases,exports will decrease.

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Definitions:

John Maynard Keynes

A British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments, known for advocating increased government expenditures and lower taxes to stimulate demand and pull the global economy out of depression.

Classical Economists

A group of economists from the 18th and 19th centuries, including figures like Adam Smith and David Ricardo, who focused on the ideas of free markets and economic growth.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, that lenders charge borrowers.

Classical Economists

Economists from the 18th and 19th centuries who believed in self-regulating markets and emphasized the importance of supply in determining economic value.