📚 Learning Guide
Aggregate Demand and Unemployment
easy

An increase in net exports will always lead to a decrease in cyclical unemployment, regardless of other economic factors.

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Learning Path

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A

True

B

False

Understanding the Answer

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Answer

Net exports refer to the value of a country's exports minus its imports. When net exports increase, it means that a country is selling more goods to other countries than it is buying from them. This can lead to more production in local factories, which often means hiring more workers, thus reducing cyclical unemployment. However, it's important to remember that other factors, like overall economic conditions or government policies, can also influence unemployment rates. For example, if a country experiences high demand for its exports during an economic boom, more jobs will likely be created, but if there is a recession, even increased net exports may not reduce unemployment significantly.

Detailed Explanation

It's not always true that more exports will lower unemployment. Other options are incorrect because Some people think that more exports will always mean more jobs.

Key Concepts

Aggregate Demand
Unemployment
Topic

Aggregate Demand and Unemployment

Difficulty

easy level question

Cognitive Level

understand

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