________ Is Most Likely to Contribute to an Improvement in Our

question 32

Multiple Choice

________ is most likely to contribute to an improvement in our living standard.

• A)An increase in real GDP
• B)An increase in the price level
• C)A decrease in nominal GDP
• D)An increase in depreciation
• E)An increase in the GDP deflator combined with a decrease in nominal GDP

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Definitions:

Free-Trade Theories

Economic theories advocating for the elimination of barriers to the exchange of goods and services between nations, to encourage trade and economic growth.

Mercantilism

A trade theory which suggests that trade generates wealth for a country with a trade surplus, with emphasis on colonization and military conquest.

Interventionist Trade Theory

A theory suggesting that government intervention in international trade through policies and regulations is necessary to correct market failures and protect domestic industries.

Trade Surplus

Occurs when a country's exports exceed its imports, indicating a positive balance of trade.