Solved by Expert Tutors
Solved by Expert Tutors

In 2018, the U.S. aggregate real GDP, Y, increased faster than it

had been growing in the previous few years, while net exports declined. We want to figure out what factors may have caused this outcome. Assume that the markets for money and for goods and services were both in equilibrium at all times. We know that the LM curve did not shifted in that year. Which one of the following factors could have contributed to the higher GDP growth and lower net exports of the US economy in 2018?

a.A reduction in net taxes.
b.A decrease in the nominal interest rate.
c.A decrease in the expected inflation rate.
d.A decrease in the expected return on investment.
e.A rise in the real incomes of US trading partners.

Step-by-step answer

a. Fusce dui lectus, congue vel laoreet ac,

ipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum

, dictu

Subscribe to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question