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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

If the value of a nation’s imports exceeds the value of its exports, which of the following is NOT true?

a. Net exports are negative.

b. GDP is less than the sum of consumption, investment, and government purchases.

c. Domestic investment is greater than national saving.

d. The nation is experiencing a net outflow of capital.

To determine

Changes in volume of export and import.

Explanation

Option (d):

If the value of a nation’s import exceeds its value of export, it results in the net export being negative. When the value of a nation’s import exceeds its value of export, the nation experiences a net out flow of capital, which is a wrong statement. Thus, the option “d” is correct.

Option (a):

When value of a nation’s import exceeds its value of export, it leads to the net export being negative. That is, the additional value of export over the imports declined. Thus, the option “a” is incorrect...

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