Author Question: If exports and imports both rose, but exports rose more than imports, a. AD would decrease. b. AD ... (Read 66 times)

Jramos095 · **on:** Jun 30, 2018

If exports and imports both rose, but exports rose more than imports,
a. AD would decrease.
b. AD would increase.
c. AD would be unaffected.
d. AD could either increase or decrease.

Question 2

Assume that the multiplier effect for Mexico is 0.85 for an increase in spending by the U.S. government by 1 . Therefore, a 20 billion decrease in spending by the U.S. government results in:
a. a 23.5 billion increase in Mexican real GDP.
b. a 133.3 billion decrease in Mexican real GDP.
c. a 3 billion decrease in Mexican real GDP.
d. a 17 billion decrease in Mexican real GDP.
e. a 23.5 billion decrease in Mexican real GDP.