Page 119 - Macroeconomics. book docx_Neat

B. Government budget

C. International transactions

D. Household savings

Answer: A

9. Exports increase:

A. Aggregate demand
B. Imports

C. Taxes

D. Inflation automatically

Answer: C

10. Imports are part of:

A. C

B. I
C. G

D. Foreign sector

Answer: C

True or False Questions
1. Exports reduce national income. (False)

2. Imports are produced domestically. (False)

3. Open economies trade with other countries. (True)
4. Net exports can be negative. (True)

5. Tariffs encourage imports. (False)

6. Foreign sector has no impact on GDP. (False)

Summary
The foreign sector is a vital component of macroeconomics in an open economy. It

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