If Adding Net Exports to C + I + G

question 73

Multiple Choice

If adding net exports to C + I + G causes the expenditure line to shift up in a parallel way, it implies that

• A)imports and exports are not sensitive to changes in income.
• B)both exports and imports are sensitive to changes in income.
• C)exports are sensitive to changes in income.
• D)imports are sensitive to changes in income.
• E)imports and exports have an uncertain effect on income.

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Definitions:

Donald Boudreaux

An American economist known for his work in free market economics and public choice theory, and for being a prolific writer on these subjects.

Private Property

Assets or possessions owned by individuals or corporations and protected by law from unauthorized use or trespass by others.

Alternative Uses

The different purposes or applications a resource can be used for, highlighting economic choices and trade-offs.

Capital Goods

Long-lasting goods acquired and used by businesses to produce goods and services and contribute to their productive capacity.