Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 20, Problem 6SQ
To determine
The cause of the net export effect.
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Students have asked these similar questions
If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would
a
rise, making aggregate demand shift left.
b
rise, making aggregate demand shift right.
c
fall, making aggregate demand shift left.
d
fall, making aggregate demand shift right.
Suppose the current price level in the economy is 150 and real GDP is$5t. Net exports fall by$1t. What must be true? A the price level is now more than 150
B SRAS shifts to the left
(C) the price level is now less than 150
(D) SRAS shifts to the right
One reason for an increase in aggregate demand (AD) on the net exports side is
A
a rise in the expected rate of return.
B
a rise in interest rates.
C
an increase in foreign demand.
D
an increase in the relative price of U.S. goods.
Chapter 20 Solutions
Economics For Today
Ch. 20.7 - Prob. 1YTECh. 20.A - Prob. 1SQPCh. 20.A - Prob. 2SQPCh. 20.A - Prob. 3SQPCh. 20.A - Prob. 4SQPCh. 20.A - Prob. 5SQPCh. 20.A - Prob. 6SQPCh. 20.A - Prob. 1SQCh. 20.A - Prob. 2SQCh. 20.A - Prob. 3SQ
Ch. 20.A - Prob. 4SQCh. 20.A - Prob. 5SQCh. 20.A - Prob. 6SQCh. 20.A - Prob. 7SQCh. 20.A - Prob. 8SQCh. 20.A - Prob. 9SQCh. 20.A - Prob. 10SQCh. 20.A - Prob. 11SQCh. 20.A - Prob. 12SQCh. 20.A - Prob. 13SQCh. 20.A - Prob. 14SQCh. 20.A - Prob. 15SQCh. 20.A - Prob. 16SQCh. 20.A - Prob. 17SQCh. 20.A - Prob. 18SQCh. 20.A - Prob. 19SQCh. 20.A - Prob. 20SQCh. 20 - Prob. 1SQPCh. 20 - Prob. 2SQPCh. 20 - Prob. 3SQPCh. 20 - Prob. 4SQPCh. 20 - Prob. 5SQPCh. 20 - Prob. 6SQPCh. 20 - Prob. 7SQPCh. 20 - Prob. 8SQPCh. 20 - Prob. 9SQPCh. 20 - Prob. 10SQPCh. 20 - Prob. 11SQPCh. 20 - Prob. 1SQCh. 20 - Prob. 2SQCh. 20 - Prob. 3SQCh. 20 - Prob. 4SQCh. 20 - Prob. 5SQCh. 20 - Prob. 6SQCh. 20 - Prob. 7SQCh. 20 - Prob. 8SQCh. 20 - Prob. 9SQCh. 20 - Prob. 10SQCh. 20 - Prob. 11SQCh. 20 - Prob. 12SQCh. 20 - Prob. 13SQCh. 20 - Prob. 14SQCh. 20 - Prob. 15SQCh. 20 - Prob. 16SQCh. 20 - Prob. 17SQCh. 20 - Prob. 18SQCh. 20 - Prob. 19SQCh. 20 - Prob. 20SQ
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Similar questions
- Price level increasing, causing a movement along the aggregate demand curve, can be explained by: the real value of savings increases. an increase in investment and consumption expenditure. a decrease in interest rates. a decrease in net exports. *Answ: a decrease in net exports. Reason: (As a result of the foreign-purchases effect, an increase in the price level causes the quantity of exports to decrease and the quantity of imports to increases, which means net exports decreases and the aggregate quantity of real GDP demanded decreases.) Explanin in detailstep by step using exaple and grapharrow_forwardWhat is the effect of the following on U.S. net exports? a) an increase in GDP in Japan b) an increase in the price of Japanese-made cars with no change in the price of U.S cars. c) An increase in the value of the U.S dollar relative to the Japanese yen.arrow_forwardIf Australia, which imports goods from the United States, went into recession, we should expect that U.S. net exports would fall, making the aggregate demand shift right. fall, making the aggregate demand shift left. rise, making the aggregate demand shift right. rise, making the aggregate demand shift left.arrow_forward
- Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?arrow_forwardWhat is J-curve? Explain the behavior of net exports represented by the J curve.arrow_forwardOther things the same, the aggregate quantity of goods demanded decreases if a. real wealth falls. b. the interest rate rises. c. the dollar appreciates. d. All of the above are correct.arrow_forward
- What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?arrow_forwardExplain the reason why the next export falls as the interest rate rises. In your explanation, you need to clearly show the sequence of events that take place after the interest rate rises and leads to a decline in the next export. * please use the terms Net Exports (N), Invesment (I), and Investment rate.arrow_forwardJapan and the United States are major trading partners and the exchange rate between the Japanese yen and the United States dollar is determined in a flexible foreign exchange market. (b) Will each of the following increase, decrease, or stay the same as a result of the increase in the United States real income? (i) Japan’s net exports. Explain. (ii) Unemployment in Japan. Explain. (iii) Japan’s long-run aggregate supplyarrow_forward
- Suppose the government provides incentives (e.g. lower company tax) to firms that engagein high levels of research and development. What happens to the quantity of net exports demanded? Explain. What happens to aggregate demand? Explain.arrow_forwardImagine that in 2050, the dollar depreciates greatly against the euro. Use the ADAS model to explain the likely short run impacts on U.S. GDP and the aggregate price level. What do you anticipate to happen to U.S. consumption expenditures and U.S. employment? Explain your reasoning for each of your predictions and show graphically as appropriate.arrow_forwardCeteris paribus, how does a recession in the United States affect U.S. net exports?arrow_forward
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