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Chapter 19: Problem 1

The net exports line can be a. positive. b. negative. c. zero. d. any of the above.

Short Answer

Expert verified
d. any of the above.

Step by step solution

01

A. Positive Net Exports

If a country has more exports than imports, the net exports line will be positive. Mathematically, \(Exports > Imports\) means that \(NX> 0\). This indicates a trade surplus.
02

B. Negative Net Exports

If a country has more imports than exports, the net exports line will be negative. Mathematically, \(Exports < Imports\) means that \(NX < 0\). This indicates a trade deficit.
03

C. Zero Net Exports

If a country's exports and imports are equal, the net exports line will be zero. Mathematically, \(Exports = Imports\) means that \(NX = 0\). This indicates a balanced trade.
04

D. Any of the above

As we have seen in the previous steps, net exports can be positive, negative, or zero, depending on a country's exports and imports. Therefore, the net exports line can be any of the above. Hence, the correct answer is: d. any of the above.

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Most popular questions from this chapter

The spending multiplier is defined as a. \(1 /(1-\) marginal propensity to consume). b. \(1 /\) (marginal propensity to consume). c. \(1 /(1-\) marginal propensity to save). d. \(1 /\) marginal propensity to consume \(+\) marginal propensity to save).

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