Net Export Function in the Multiplier Model
In the multiplier model, the net export function specifies net exports () as the difference between exogenous exports () and imports that are dependent on income (). This relationship is expressed by the formula: , where represents the marginal propensity to import.
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Introduction to Macroeconomics Course
Ch.3 Aggregate demand and the multiplier model - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Country X and Country Y are identical in all economic aspects, except that the citizens of Country X tend to spend a larger fraction of any new income on foreign goods compared to the citizens of Country Y. If both countries experience an identical, significant rise in their national income, which of the following outcomes is most likely?
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Net Export Function in the Multiplier Model
Net Exports Function
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Net Export Function in the Multiplier Model
Net Exports Function
Learn After
In an economy, the relationship between net exports (NX) and national income (Y) is given by the function NX = X - mY, where X represents autonomous exports and 'm' is the marginal propensity to import. If this economy's consumers develop a stronger preference for imported goods, how will this change be represented in the model, assuming autonomous exports and national income initially remain constant?
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A country's economy experiences a significant and sustained rise in its aggregate income. Assuming that the value of its exports and its marginal propensity to import remain constant, what is the most likely impact on the country's net exports?
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A government policy that successfully stimulates a significant increase in a country's national income will, all else being equal, necessarily lead to an improvement in its net exports.
An open economy has autonomous exports valued at $200 billion. Its citizens tend to spend 15 cents of each additional dollar of income on imported goods. If the total national income for this economy is $1000 billion, what is the value of its net exports?
Consider two economies, Country A and Country B, with the following net export functions, where NX is net exports and Y is national income (both in billions of dollars):
Country A: NX = 500 - 0.1Y Country B: NX = 300 - 0.3Y
Based on this information, which of the following statements is the most accurate analysis of the relationship between national income and net exports in these two countries?
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An open economy has autonomous exports valued at $200 billion. Its citizens tend to spend 15 cents of each additional dollar of income on imported goods. If the total national income for this economy is $1000 billion, what is the value of its net exports?
A government policy that successfully stimulates a significant increase in a country's national income will, all else being equal, necessarily lead to an improvement in its net exports.
Consider two economies, Country A and Country B, with the following net export functions, where NX is net exports and Y is national income (both in billions of dollars):
Country A: NX = 500 - 0.1Y Country B: NX = 300 - 0.3Y
Based on this information, which of the following statements is the most accurate analysis of the relationship between national income and net exports in these two countries?