In explaining the downward-sloping aggregate demand curve, the net export effect is:
a. When a nation's price index falls, international capital flows are attracted to it, which causes the net exports to rise.
b. When the price index falls, net exports fall because a nation's exports become relatively cheaper and its imports become relatively more expensive.
c. When the price index falls, the real money supply rises, causing the real risk-free interest rate to fall, and consumption and real investment to rise.
d. When the price index falls, net exports rise because a nation's exports become relatively cheaper and its imports become relatively more expensive.
e. When the price index falls, central banks intervene to bring prices back to where they were, causing net exports to rise.
.D
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Hedonic pricing is used to
A) convert nominal values to real values. B) calculate the difference between nominal GDP and real GDP. C) measure the rate of change in real GDP. D) obtain chain-weight indexes. E) none of the above
A tax for which the average tax rate rises with income is defined as a
a. regressive tax. b. proportional tax. c. neutral tax. d. progressive tax.