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Suppose in Taiwan this year the real income, price level, interest rate, exchange rate, net taxes, conditions in the rest of the world, and expectations
Suppose in Taiwan this year the real income, price level, interest rate, exchange rate, net taxes, conditions in the rest of the world, and expectations of future trends in the economy are given for households and firms. If in this situation the real income in the rest of the world increases, this year in Taiwan
a.net exports will rise.
b.net exports will decline.
c.net exports will remain unchanged.
d.net exports may rise or decline.
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