QUESTION 6 If the U.S. dollar appreciated, we would expect the U.S. to export because a stronger dollar makes other countries' goods than before. Please calculate its size At the same time, imports would a. less; increase; cheaper b. the same; remain the same; cheaper c. more; remain the same; more expensive d. less; decrease; more expensive e. more; decrease; more expensive QUESTION 7 Suppose that the behavior of households and firms in an economy is determined by the following equations C-60+0.9Yd. d. GDP minus imports. The amount by which the aggregate expenditures schedule must shift downward to decrease the nominal GDP to its full-employment noninflationary level.The amount by which the aggregate expenditures schedule must shift upward to increase the real GDP to its full-employment, noninflationary level.decrease aggregate expenditures beyond what they would be in a closed economy and thus have a contractionary effect. These planned inventory changes are based on expectations of either faster or slower sales. Imports are not added in GDP because they QUESTION 5 Net exports are equal to... a. exports minus imports b. exports minus depreciation. B. exports must be negative. In a small open economy, if exports equal $5 billion and imports equal $7 billion, then there is a trade _____ and _____ net capital outflow. Net exports of goods and services is defined as equal to? Macro Flashcards | Quizlet [7/17/2017 2:26:00 AM] In calculating GDP, we mus add the market value of exports and subtract the market value of exports Which of the following expenditure components of GDP can be negative or positive? A. exports must be positive. If a country’s exports are larger than its imports, then a country is said to have a trade surplus. Please calculate its size . 10. The formula for net exports is a simple one: The value of a nation's total export goods and services minus the value of all the goods and services it imports equal its net exports. d. exports divided by imports.
e. Is the economy running a trade surplus or a trade deficit? Also, increases in spending can drive up prices (inflation) and at higher prices, any given amount of spending will buy less real output.IF the real interest rate falls, investment spending increases (equilibrium GDP increases)the percentage of each dollar of income, on average, that a person spends for current needs rather than savingsFraction (or percentage) of disposable income that households save; saving divided by disposable income.the slope of the consumption function: the amount by which consumption spending changes when disposable income changesthe amount by which saving changes when disposable income changes, the slope of the savings schedulecurrent disposable income, household wealth, expected future income and price levels, real interest rates, household borrowingThe tendency for people to increase their consumption spending when the value of their financial and real assets rises and to decrease their consumption spending when the value of those assets falls.Movement along a consumption function due to a change in income (caused by a change in Real GDP)change in consumption due to a change in any factor affecting consumption other than disposable incomemove consumption and savings functions in different direction except for taxes, because taxes are paid partially at the expense of both consumption and savingsThe expected rate of return is the marginal benefit and the interest rate (the cost of borrowing funds) represents the marginal cost., for investmentA line along which the value of GDP (measured horizontally) is equal to the value of aggregate expenditures (measured vertically).acquisition, maintenance, and operating costs- on investment demand curvewhen these costs increase, the expected rate of return falls, and the investment demand curve shifts leftan increase in these lowers the expected profitability of an investment and shifts the investment demand curve left, a reduction in taxes shifts the investment demand curve rightDevelopments in more efficient technology lowers cost/ improves quality, increases expected rate of returnplanned inventory changes- on investment demand curveIf firms are planning on increasing their inventories, investment demand shifts to the right.