An Increase in Exports Will Have What Effect on Aggregate

question 11

Multiple Choice

An increase in exports will have what effect on aggregate demand?

• A)It will decrease.
• B)It will increase.
• C)It may increase or decrease depending on the marginal propensity to import.
• D)It will have no effect on aggregate demand.

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Definitions:

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, offering a snapshot of its financial condition.

Operating Cycle

A measure of the time span between the purchase of inventory and the collection of cash from accounts receivable, highlighting the time taken for a business to turn its inventory into cash.

Current Liabilities

Short-term financial obligations a company must pay within a year, such as accounts payable, short-term loans, and accrued expenses.

Liquidation

The process of bringing a business to an end and distributing its assets to claimants, often occurring when a company is insolvent and unable to meet its financial obligations.