Assuming the economy is operating below its potential output, what is the impact of an increase in net exports on real GDP ? Why is it difficult, if not impossible, for a country to boost its net exports by increasing its tariffs during a global recession?

Q: An initial increase in investment spending will generate: Less of an increase in income…

A: The amount of desired investment would rise as a result of an increase in investment, which would…

Q: How are the following events likely to influence the level of private domestic investment? 1) GDP…

A: The amount of money invested by domestic businesses in their home country is referred to as a…

Q: A shift in aggregate demand curve to the left, means a. Increase in consumption b. Decrease in…

A: The aggregate demand curve will in general move to one side when absolute buyer spending decays.…

Q: Complete the table by indicating the change in each determinant necessary to decrease aggregate…

A: The aggregate demand is a measurement in economics which calculates the aggregate or total demand of…

Q: Your Facebook feed shows a news article which says the Consumer Confidence Index has decreased.…

A: My Facebook feed shows a news article which says the Consumer Confidence Index has decreased. It's…

Q: Explain how an upsloping aggregate supply curve weakens the realized multiplier effect from an…

A: AS refers to the total amount of commodities and services that are supplied in an economy during a…

Q: Which of the following events would cause the aggregate expenditure line to shift upward?  Select…

A: Aggregate expenditure line shifts upward if there is increase in expenditure.

Q: Which of the following tax policies is most likely to increase investment and long-run aggregate…

A: Taxes are the charge or fee imposed by the government on any economic activity. It tends to…

Q: If countries that imported goods and services from the United States went into recession, we would…

A: Recession is a situation of economic downfall when there is higher supply of goods and services in…

Q: When there is a change in price level that affects the total net exports, that is called Real money…

A: Real Money effect shows the changes in money supply which affect the purchasing power. Wealth Effect…

Q: A reduction in U.S net exports would shift U.S. aggregate demand A. rightward. In an attempt to…

A: The correct answer is option c

Q: What impact will budget deficits have on the exchange rate value of the dollar? How will this impact…

A: The conventional macroeconomic theory purports that a rise in deficit leads to a rightward shift of…

Q: When households in the United States have more income to spend, they increase their consumption…

A: Answer: True, Explanation: Net export refers to the difference between export and import (Net…

Q: Why is inventory investment counted as part of aggregate spending if it isn’t actually sold to the…

A: Inventory is the term used for the products available for sale and the raw materials used to make…

Q: What

A: # investment multiplier is given as the inverse ratio of the marginal propensity to save.…

Q: Suppose you own a toy store in the United States, where there is high demand for the PlayNation 3, a…

A: $15000 is spent on inventory of the gaming system which is manufactured by Zony, a japanese company,…

Q: What is the present status of consumer confidence as measured by the Conference Board’s index? How…

A: The consumer confidence would be the consumer confidence to consume and investment which would…

Q: If net exports increase by 100 and the mpc is 0.75, equilibrium aggregate output increases by

A: MPC is the marginal propensity to consume which is the proportion of change in income that is spent…

Q: Consider a small economy that is closed to trade, so that its net exports are zero. Suppose that the…

A:

Q: An increase in net exports will shift the AD curve to the Multiple Choice right by a multiple of the…

A: A change in a component of AD shifts the AD by multiple of the change in component. AD components…

Q: If investment and consumption expenditures fall and cause GDP to fall, what is an appropriate…

A: The fall in the investment and the consumption expenditures would result in the fall in the…

Q: How are the following events likely to influence the level of American net exports? 1) Consumers in…

A: The balance of trade measures the difference between the value of an economy's total exports and…

Q: Which statement most accurately represents the effect of rising stock prices on aggregate…

A: The answer will be: It boosts consumption, but not as much as a shift in  MPC (Marginal propensity…

Q: How would a dramatic increase in the value of the stock market shift the AD curve? What effect would…

A: An expansion in the value of the stock market would cause people to feel richer and in this way,…

Q: According to the shares of spending model, what would happen to interest rates, consumption,…

A: What happens when Net export increases  According to shares of spending model, INTEREST RATE The…

Q: Suppose that with the liquidity facilities and asset purchase programs, the Bank of Canada increased…

A: Equilibrium is achieved at the point where IS and LM curve intersects each other. IS curve consists…

Q: Flow Injection Leakage Saving (S) Net taxes (NT) Exports (X) Investment spending (I) Government…

A: Injection in circular flow cause increase in income in flow . It includes Introduction of income.…

Q: An increase in households’ desired money holding causes an increase in interest rates. How does this…

A: Household's supply of money in the form of bank deposit is a major source of supply of funds in the…

Q: if the multplier in an economy is 2, a $10 billion increase in net exports will

A: The Multiplier Effect :  An initial fiscal injection in the economy gives us a comparatively higher…

Q: Prove the foreign investment multiplier is equal to 1 all over mpm + mps (1/mpm+mps)

A: Multiplier is an important part of modern economics, Keynes introduced the concept of investment…

Q: 1. If the aggregate consumption function shifts up, the level of income-expenditure equilibrium GDP…

A: NOTE: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: With the help of an IS-LM diagram, explain the effects of an increase in government spending on on…

A: The IS-LM model is impacted by changes in government spending, which impacts output and interest…

Q: How are the following events likely to influence the level of private domestic investment?…

A: Private domestic investment refers to the total expenditure made by the people of a country in…

Q: Total output of an economy can be divided into its alternative uses by considering who bought the…

A: Gross domestic product is the value of all final goods and services produced in an economy over a…

Q: is meant by the current account multiplier in relation to a fiscal propriate equation

A: *Answer:  Economists and politicians have long been fascinated by the link among both fiscal policy…

Q: If South Africa were to discover a plentiful supply of cheap oil, this would: Select one: A. move…

A: AD shows the different levels of price and quantity that buyers are ready to offer. AS shows the…

Q: On the following graph, use the blue curve to plot investment as a function of disposable income:…

A: Disposable income refers to the income that is available for the economy to spend. Aggregate…

Q: if investment spending at each level of output increases by $120 billion, what will equilibrium…

A: Equilibrium Output is the amount of output in an economy where Aggregate Demand equals Aggregate…

Q: Are the inventories typically the least liquid of a firm 's current assets? How?

A: It depends whether the Inventories are the least liquid or not of a firm's current asset. First of…

Q: How does an increase in foreign income affect domestic aggregate expenditures and demand?

A: When foreign income increases,domestic country's trade partners income increases.

Q: If a change in the real interest rate has no effect onplanned investment spending or net exports,…

A: IS curve shows the different combinations of interest rate(r) and output(Y) which keeps the…

Q: Which of the following reflects aggregate demand in a closed economy? OC+I+G. OC+I. OY-T. OY -C-G.

A: "Aggregate demand in a closed economy reflects the total amount of all final commodities and…

Q: How does a change in the interest rate affect aggregate investment? What if firms prefer to pay for…

A: The three factors which affect the investment spending of aggregate investment are interest rate,…