The impact of increasing imports rather than exports.
Explanation of Solution
Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows
Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.
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Chapter 26 Solutions
Economics: Principles and Policy (MindTap Course List)
- Please explain and discuss supply-side economics.arrow_forwardUse an aggregate demand and supply diagram to illustrate and explain how each of the following will affect the equilibrium price level and the real GDP.• Consumers expect a recession• Foreign income rises• Foreign price levels fallarrow_forwardHow can a reduction in Corporation Tax lead to supply side improvements in an economy?arrow_forward
- Which of the following could be a cause for imports not decreasing despite policy measures taken? Select One: a) Imports constitute consumer goods b) Demand is elastic c) Goods are luxuries d) Imports constitutes capital goods e) Export demand is inelasticarrow_forwardDefine what economists mean when they use the word: “recession”?arrow_forwardOf the four choices below, which causes a shift in the Supply of dollars to the right? A. An expansionary fiscal policy that raised U.S. income and increased U.S. imports.B. An expansionary fiscal policy that raised U.S. income and reduced U.S. imports.C. A contractionary fiscal policy that reduced U.S. income and lowered U.S. imports.D. A contractionary fiscal policy that reduced U.S. income and increased U.S. imports.arrow_forward
- At the monetary policy meeting in February 2021, the central bank of Mexico cut its policy the rate for the first time since September in an effort to stimulate the economy. However, after the United States government announced in March 2021 the introduction of a new financial stimulus package to boost the US economy, the Governor of the Mexican central bank announced that the board would consider the impact of the US fiscal stimulus in the Mexican economy, and whether it is necessary to change their monetary response. Explain how a US fiscal stimulus may affect the Mexican economy and why the central bank may respond to it. (100 words max)arrow_forwardwhat is the effects of indirect taxes on inflation and demand.arrow_forwardWhich of the following statements concerning the aggregate demand and aggregate supply model is correct? a. The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. b. The price level and quantity of output adjust to bring aggregate demand and supply into balance. c. The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price. d. The aggregate demand shows the quantity of goods and services that firms are willing to produce at a given price level.arrow_forward
- How do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.arrow_forwardLike the supply curve for individual goods and services, the aggregate supply curve slopes upward and to the right.True or Falsearrow_forwardCan you please answer question 44, please? No explanation needed 44. A key supply-side policy is to make sure that workers are well trained. Which of the following is true? A) UK labour turnover is less than that of comparable countries. B) The UK spends a smaller percentage of its GDP on training than comparable countries. C) UK workers are better educated than US workers. D) UK workers are better trained than German workersarrow_forward
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning