An Increase in Real Net Exports Leads to an Increase

question 12

Multiple Choice

An increase in real net exports leads to an increase in real GDP. Further

• A) real consumption spending and real saving increase.
• B) real consumption spending increases but real saving does not change.
• C) real consumption spending increases while real investment spending decreases.
• D) real government spending decreases to offset the increase in real net exports.

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Definitions:

Principal Payments

Payments made towards the original amount borrowed in a loan, excluding interest payments, thereby reducing the outstanding principal balance.

Covenant Compliance

Refers to a borrower's adherence to the conditions set forth in loan agreements with lenders.

Accounting Principles

Fundamental concepts and rules that underlie financial accounting practices.

Financial Covenants

Provisions in a loan agreement that limit the borrower's actions in certain ways, ensuring the repayment of the loan.