In a simple macro model,it is generally assumed that a country's exports
A)and imports are autonomous.
B)and imports are induced.
C)are autonomous,whereas imports are induced.
D)are induced,whereas imports are autonomous.
E)are always equal to investment.

Question

Quizplus · Accepted Answer

In a simple macro model, exports are assumed to be autonomous because they depend on external demand and foreign economic variables. Imports, on the other hand, are induced because they depend on domestic income and consumption levels. Therefore, the correct choice is C, where exports are autonomous and imports are induced.

In a Simple Macro Model,it Is Generally Assumed That a Country's