Question

Question Help Exports and imports Increase The aporta el goods and worden decreased 0.1 percent in the first quarter of 2017, aterrang 6.2 percent in the preto que el mensal pote and services wereused 3.3 percent, ator tuting 30 percent in the previous quarter Explain how the changes in exports and imports reported hereinence the quantity of real GDP demanded and demand In which of the two quartiers reported sports and imports make the greater corbution to regate demand grown! The changes in exports in the Quarter of 2016 and in the first quarter of 2017 O A decrease agregate demand, decrease aggregate demand OB. Increase the quantity of real GOP demande decrease the quantity of real GOP demanded OC increase aggregate demand, decrease regate demand OD. Increase aggregate demand increase agregate demand

Answer 1

1^st qtr. Of 2016:

Export: increases 0.2%

Import: decreases 3%

1^st qtr. Of 2017:

Export: decreases 0.1%

Import: increases 3.3%

Net export which is (export – import) is a component of aggregate demand (AD). It increases if net export increases and decreases if net export decreases. If AD increases, the real GDP demanded also would be increased, and vice versa.

Net export in 2016 would increase, since export increases and import decreases. Therefore, both AD and real GDP demanded would increase.

Net export in 2017 would decrease, since export decreases and import increases. Therefore, both AD and real GDP demanded would decrease.

The 1^st quarter of 2016 reported the greatest contribution of net export to AD growth. This is so because compared to the 1^st quarter of 2017, net export is higher in 2016.

MCQ:

Answer: C

Only export is a component of AD. Since export increases in 2016, its AD would increase there; since export decreases in 2017, its AD would decrease there.

Real GDP demanded should not be considered here, since it depends on net export or export minus import.