1 If a country has net exports of 8 billion and sold 40 bill

1. If a country has net exports of $8 billion and sold $40 billion of goods and services abroad, then it has (Points : 2)        $48 billion of imports and $40 billion of exports.
       $48 billion of exports and $40 billion of imports.
       $40 billion of imports and $32 billion of exports.
       $40 billion of exports and $32 billion of imports.

Solution

1. If a country has net exports of $8 billion and sold $40 billion of goods and services abroad, then it has

$48 billion of exports and $40 billion of imports.

2. Assume the President and the Congress increase government spending. Some economists think this increase would have little effect on output.

The MPC is small and changes in the interest rate have a large effect on investment

Increase government expenditures or increase the money supply

4. Assume the President and the Congress cut taxes and raise government expenditures. According to the aggregate supply and aggregate demand model:

Both the tax cut and the increase in government expenditures would tend to increase output.

5. If the U.S. has exports of $1.5 trillion and imports of $2.2 trillion, then the U.S.

Sells more overseas then it buys from overseas; it has a trade surplus.

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