Suppose policy makers want to increase Y and keep NX constant. Which of the following policies would most likely achieve this?
A) an increase in government spending
B) a real depreciation
C) an increase in government spending and a reduction in the real exchange rate
D) a reduction in the real exchange rate
E) encourage the country's trading partners to implement policies that will cause an increase in foreign income (Y)
E
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Positive economics answers the question, "What ought to be?" Normative economics predicts the consequences of alternative actions, answering the questions, "What is?" or "What will be?"
Indicate whether the statement is true or false
A monopolistic competitor exits the industry in the long run if ________
A) total revenue exceeds total cost B) total costs exceed total revenue C) marginal revenue exceeds marginal cost D) marginal revenue equals marginal cost