question archive Assume a nation's economy is operating in equilibrium
Assume a nation's economy is operating in equilibrium
Subject:MarketingPrice:2.88 Bought3
Assume a nation's economy is operating in equilibrium. If exports increase and imports decrease, how will output, employment, and price level likely change? (Output/Employment/Price Level)
A. Increase/Increase/Increase
B. Decrease/Decrease/Decrease/
C. Increase/Decrease/Increase
D. Decrease/Decrease/Increase
E. Increase/Increase/Decrease
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
- The correct option is (A) - Increase/Increase/Increase.
Here, it is stated that economy is operating at the equilibrium state initially; however, after this, there is a rise in the net exports (Exports - Imports) of the economy which positively contributes towards raising the output level, price level, and the employment level by shifting the aggregate demand curve rightwards.
