Figure 20-9 -In Figure 20-9,the C + I + G + (X − IM) 1 line is flatter than the C + I + G + (X − IM) 0 line because the

The (X − IM) 1 line being flatter suggests that net exports decline as GDP rises, which is consistent with choice A.

Figure 20-9 -In Figure 20-9,the C + I + G + (X − IM) 1 line is flatter than the C + I + G + (X − IM) 0 line because the

The (X − IM) 1 line being flatter suggests that net exports decline as GDP rises, which is consistent with choice A.

Solved

Figure 20-9 -In Figure 20-9,the C + I + G + (X

Question 193

Multiple Choice

Figure 20-9
-In Figure 20-9,the C + I + G + (X − IM) ₁ line is flatter than the C + I + G + (X − IM) ₀ line because the

A) (X − IM) ₁ line indicates that net exports decline as GDP rises.
B) (X − IM) ₁ line indicates that net exports rise as GDP rises.
C) multiplier is greater for the (X − IM) ₁ line.
D) (X − IM) ₁ line indicates that tariffs,quotas,and other trade barriers are keeping net exports below their full potential.

Correct Answer: