A Decrease in the Real Interest Rate in the U

question 84

Multiple Choice

A decrease in the real interest rate in the U.S.will cause net exports to:

• A)Increase because exports will remain constant but imports will decrease
• B)Decrease because exports will decrease and imports will increase
• C)Decrease because exports will increase but imports will increase
• D)Increase because exports will increase and imports will decrease

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Definitions:

Network Externality

A situation where the value of a product or service increases for a user when more people use it.

Facebook

A social networking platform that allows users to create profiles, share photos and videos, send messages, and keep in touch with friends, family, and colleagues.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods or services.

Price Elasticity

The measure of how the quantity demanded of a good or service changes in response to a change in its price.