Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in aggregate demand
B
Decrease in unemployment
C
Decrease in consumer confidence
D
Increase in inflation
Understanding the Answer
Let's break down why this is correct
Answer
When consumer spending increases, it means people are buying more goods and services, which boosts overall demand in the economy. This rise in aggregate demand can lead to more businesses producing more products, creating jobs and reducing unemployment. Similarly, when net exports increase, it means a country is selling more goods and services to other countries than it is buying from them. This also raises aggregate demand because more money flows into the economy from foreign buyers. For example, if a country starts exporting more cars, the car manufacturers will need to hire more workers, which helps lower unemployment and stimulates further economic growth.
Detailed Explanation
When net exports go up, it means more goods are sold to other countries. Other options are incorrect because Some might think that more demand directly means fewer jobless people; People might believe that higher exports would make consumers feel less confident.
Key Concepts
Aggregate Demand
Net Exports
Unemployment
Topic
Aggregate Demand and Unemployment
Difficulty
medium level question
Cognitive Level
understand
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