Question 1
Assume that a $1.00 increase in exports increases GDP by $3.00, and a $1.00 increase in income increases import spending by $0.15. In this case, a ________ million increase in exports will increase net exports by $550 million.
◦ $550
◦ $700
◦ $1,000
◦ $1,350
Question 2
The ________ effect illustrates the fact that imports affect exports and exports affect imports.
◦ net export
◦ crowding out
◦ co-dependency
◦ trade feedback