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If an Economy Sees Net Exports Fall Due to a Policy

question 65

Multiple Choice

If an economy sees net exports fall due to a policy of trade liberalization,it will require the simultaneous adoption of ________ fiscal policy or ________ monetary policy in order to prevent a(n) ________ gap.


Definitions:

Replacement Cost

The current market price it would cost to replace an asset with a similar new asset.

Market Value

The present cost at which a service or asset is available for purchase or sale on an open market.

Selling Price

The amount of money for which a product or service is sold to customers, which may include discounts, promotions, or variable pricing strategies.

Conservatism

An accounting principle that requires potentially uncertain expenses and liabilities to be recognized promptly, but revenues only when they are assured.

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