Adding Investment

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Unformatted text preview: l GDP 174 • Positive net exports increase aggregate expenditures on domestic output and increase equilibrium GDP • Negative net exports decrease aggregate expenditures on domestic output and reduce equilibrium GDP. 28 Linkages: √ Prosperity aboard: Rising level of national income among our trading partners will enable us to sell more of our exports. (Japan’s 10-year recession has hurt our export sales to Japan) √ Tariffs: Tariffs on their side reduce export sales; retaliation is an issue. (Think of Great Depression and Hoot-Smalley Tariff) √ Exchange Rates: Depreciation of $ will stimulate exports and lower imports exp...
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This note was uploaded on 01/30/2014 for the course ECON 259 taught by Professor Geanakopolis during the Fall '10 term at Purdue University-West Lafayette.

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