Exports Are Added To, and Imports Are Subtracted From, Aggregate

question 174

True/False

Exports are added to, and imports are subtracted from, aggregate expenditures in moving from a closed to an open economy.

---

Definitions:

Marginal Productivity

The increase in output resulting from a one-unit increase in the input of a particular resource, while holding inputs of all other resources constant.

Output Constant

A fixed amount of production that does not change with the levels of input.

Isocost Line

A graph representing all combinations of inputs which cost the same total amount.

Price of Capital

The cost of borrowing money or the return that is required for an investment in equipment or buildings.