If the National Incomes of Our Trading Partners Increase, Then

question 16

Multiple Choice

If the national incomes of our trading partners increase, then our:

• A) Aggregate demand decreases because C decreases
• B) Aggregate demand increases because C increases
• C) Aggregate demand decreases because net exports decrease
• D) Aggregate demand increases because net exports increase

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are subtracted, used to cover fixed costs and generate profit.

Variable Administrative Expenses

Costs that change in proportion to the activity of a business.

Incremental Manufacturing Cost

The additional cost incurred to produce an additional unit of a product.

Production Increase

An increment in the amount of products manufactured by a company during a specified period.