Which one of the following is NOT a component of aggregate demand?
A. government purchases
B. goods exported to other countries
C. consumption spending
D. investment expenditures
Answer: B
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In a perfectly competitive market, situations of surplus or shortage of a good:
A) exist till the government or any ruling authority intervenes. B) are permanent phenomena. C) can exist simultaneously. D) are self-corrected due to the competitive nature of the market.
Suppose only 7 percent of Turkey's products go to the United States. Hence, an increase in U.S. imports from Turkey:
a. would have no significant effect on Turkey's domestic income. b. would significantly increase Turkey's domestic income. c. would significantly decrease Turkey's domestic income. d. would significantly increase U.S. domestic income. e. would significantly decrease U.S. domestic income.