Question

In which case will net exports increase?

	an increase in investment
	more than one of the above
	an increase in government spending
	an increase in taxes
	a real appreciation

The natural level of employment will increase when which of the following occurs?

	a decrease in unemployment benefits
	an increase in the actual unemployment rate
	an increase in employment insurance
	an increase in the markup of prices over costs
	a decrease in the natural level of output

Which of the following must occur as a result of a policy mix involving fiscal contraction and monetary expansion?

	The interest rate increases.
	Both output and the interest rate increase.
	The interest rate decreases.
	Output increases.
	Output decreases.

In a closed economy, what happens in the short run as a result of a decrease in taxes?

	the change in the interest rate decreases investment and the change in output increases investment.
	the change in the interest rate increases investment and the change in output decreases investment.
	money supply increases.
	money demand and output increase.
	money supply decreases.

Which of the following events would lead to an increase in imports?

	a nominal depreciation
	a real depreciation
	an increase in foreign output
	an increase in domestic output
	a decrease in foreign output

Answer 1

1)real appriciation and an increase in investment

Both help in increasing export and decreasing import this means net export increases

2) decrease in unemployment benefits

At that time they aree less able to do job but then finding new if unemployment benefits ate decrease

3)  the change in the interest rate decreases investment and the change in output increases investment

4) a real depreciation

When real exchange rate is high export devrease and import increase