If All Other Factors Are Held Constant, an Increase in Imports

question 157

Multiple Choice

If all other factors are held constant, an increase in imports

• A) causes an increase in exports of the same size.
• B) causes Gross Domestic Product (GDP) to increase.
• C) causes Gross Domestic Product (GDP) to decrease.
• D) can cause Gross Domestic Product (GDP) to increase or decrease, depending on whether the imports are purchased by consumers or by business firms.

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Definitions:

Pollution

The introduction of contaminants into the natural environment, causing adverse change.

Efficient Rate

The optimal point at which the cost of undertaking an activity is minimized and productivity is maximized.

Emissions

The release of substances (usually gases or particulates) into the environment, often referring to pollutants released into the air by vehicles and industrial processes.

Marginal Social Benefits

The additional benefit that society gains from consuming one more unit of a good or service.