Other Things Being Equal, a Decrease in an Economy's Exports

question 108

Multiple Choice

Other things being equal, a decrease in an economy's exports will:

• A) Increase domestic aggregate expenditures and the equilibrium level of GDP
• B) Decrease domestic aggregate expenditures and the equilibrium level of GDP
• C) Have no effect on domestic GDP because imports will offset the change in exports
• D) Increase the amount of imports consumed by the private sector

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Definitions:

Event

An occurrence or outcome in a probabilistic context, which can be one or more results of an experiment or random process.

Outcomes

The possible results or consequences that may stem from a specific action, event, or decision.

Likelihood

A measure of how probable a particular set of observations is given a specific model or parameter value, often used in statistical inference.

Certainty

The absolute confidence in the truth or occurrence of an event or outcome, often contrasted with probability or likelihood.