Net export= export - Import
So if import of goods and services are greater than export, then net export will be negative.
The GDP can be defined the market value of all goods and services which are produced in the domestic territory of the country in the current financial years.
GDP=C+I+G+X-M
Hence when net export is negative, then value of GDP will be less than the sum of (C+I+G) because more import means more consumption and investment. Hence C+I+G will be greater than GDP (Y).
Hence option first is the correct answer.
If the import of goods and services in US exceeds the exports, then: C+I+G > GDP...
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please answer clearly thanks 2. Consider an open economy with perfect capital mobility. Analyze the effects of an increase in public spending G (AG> O) in the following cases: i. Flexible exchange rate [5p] ii. Fixed exchange rate [5p] Consider the effects on income, consumption, investments, interest rate, net exports, and exchange rate. Outline the main differences between the previous two cases
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Table 20-2 GDP Domestic Expenditure Exports Imports Total Expenditures C + I + G + (X - IM) $650 650 650 $2,500 3,000 3,500 4,000 4,500 5,000 5,500 C+I+G $3,100 3,400 3,700 4,000 4,300 4,600 4,900 $250 300 350 400 450 500 In Table 20-2, what are net exports when GDP-3,500? O a. 400 PO b. 100 Doc.300 08.200
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