If net exports are positive:
A. the equilibrium GDP must be greater than the full-employment GDP.
B. imports must exceed exports.
C. aggregate expenditures are greater at each level of GDP than when net exports are zero
or negative.
D. some other component of aggregate expenditures must be negative.
C. aggregate expenditures are greater at each level of GDP than when net exports are zero
or negative.
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What will be an ideal response?
Abby buys health insurance because she knows that she has health risks that wouldn't be obvious to an insurance company. Brad buys home owners insurance and then is less careful to make sure he's put out his cigarettes. The example with Abby
a. and the example with Brad illustrate adverse selection. b. and the example with Brad illustrate moral hazard. c. illustrates adverse selection; the example with Brad illustrates moral hazard. d. illustrates moral hazard; the example with Brad illustrates adverse selection.