Asked by Summer Bourbon on Apr 28, 2024
Verified
Which component of GDP is most likely to be negative?
A) Net exports
B) Gross private domestic investment
C) Government purchases
D) Imports
E) Consumption
Net Exports
The value of a country's total exports minus its total imports, representing the contribution of the trade balance to the overall GDP.
GDP
Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country.
Government Purchases
Expenditures made by the government sector, including spending on goods and services by local, state, and federal governments.
- Compute and elucidate trade balances, net exports, and their effects on Gross Domestic Product.
- Recognize the elements that constitute Gross Domestic Product and understand their connection with international trade.
Verified Answer
KE
Kelli EasterdayApr 29, 2024
Final Answer :
A
Explanation :
Net exports can be negative when the value of imports exceeds the value of exports. This implies that a country is spending more on foreign goods than it is earning from selling its own goods abroad, resulting in a negative contribution to GDP.
Learning Objectives
- Compute and elucidate trade balances, net exports, and their effects on Gross Domestic Product.
- Recognize the elements that constitute Gross Domestic Product and understand their connection with international trade.