Question
1.According to the NBER the U.S. economy went into a recession in February. In considering the impact of declining international trade and the global recession
1.According to the NBER the U.S. economy went into a recession in February. In considering the impact of declining international trade and the global recession on the flow of spending and income, we can conclusively say the following:
a.There will be a decrease in the injection of investment into our economy but the flow of income will largely remain unchanged.
b.Both aggregate and disposable income will fall, leading to less consumer spending and a reduced GDP.
c.International trade is not part of this model therefore only the recession will impact the level of income and savings in America.
d.As exports fall, the injection of income into America's aggregate expenditures will increase since the trade deficit will be reduced.
e.A and D only
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