Discuss the major determinants of net exports
National incomes: Although both exports and imports depend on many factors, the predominant one is income levels in different countries. When our economy grows faster than the economies of our trading partners, our net exports tend to shrink. Conversely, when foreign economies grow faster than ours, our net exports tend to rise.
Relative prices and exchange rates: A rise in the prices of a country's goods will lead to a reduction in that country's net exports. Analogously, a decline in the prices of a country's goods will raise that country's net exports. Similarly, price increases abroad raise the home country's net exports, whereas price decreases abroad have the opposite effect.
You might also like to view...
The cost-minimizing rule is that a firm should utilize inputs such that the marginal physical product of an input divided by the price of the input is the same for all inputs. This is also the profit-maximizing rule because
A) we obtain the profit-maximizing rule by multiplying each ratio by the marginal revenue produced. B) we obtain the profit-maximizing rule by multiplying each ratio by the product price, which is the same for each input. C) the profit-maximizing rule is just the inverse of the cost-minimizing rule. D) they are exactly the same.
For which of the following types of firms is the buying and selling of stocks and bonds not a primary function?
A. securities firms B. investment banks C. mutual fund companies D. thrifts