Assuming the economy is at full employment, a decrease in aggregate demand will most likely cause a change in which of the following types of unemployment?

Economists refer to externalities as an example of market failure when:

a. markets do not consider social costs as part of overall costs. b. additional external costs are so high that the firm must shut down. c. private costs are the same as costs to society as a whole. d. citizens bring lawsuits to stop production that pollutes.

Use the following diagram to answer the next question. We observe that the economy has moved from NX1 to NX3. This could have happened because ________.

A. imports decreased B. exports increased by more than imports C. exports increased by less than imports D. exports increased