The Aggregate Demand and Aggregate Supply Model Helps Us to Understand

question 22

True/False

The aggregate demand and aggregate supply model helps us to understand both short-run economic fluctuations and how the economy moves from the short to the long run.

---

Definitions:

Trade Deficit

Occurs when a country's imports exceed its exports, leading to a negative balance in trade.

Balanced Trade

A trade situation in which the value of a country's exports equals the value of its imports over a certain period.

Net Exports

The value of a country's total exports minus the value of its total imports.

Trade Surplus

The amount by which the value of a country's exports exceeds the cost of its imports.