1 During the coronavirus epidemic last year, GDP contracted by approx. 6% at the same time exports contracted much more (collapse of tourism) during imports so instead. Reasons (all changes here refer to relative changes) that the contraction in GDP was much smaller than the deteriorating balance in foreign trade in goods and service was to: (1) Two of the others are correct. (2) Changes in inventories increased when exports were made that were not produced during the year. (3) Private consumption, C collapsed and this meant that GDP contracted less than balance of exports and imports. (4) The government assisted the economy and contributed to increasing GDP by reducing public consumption, G. (4) National expenditure did not decline as much as GDP, which offset much contraction in the balance of exports and imports.
1 During the coronavirus epidemic last year, GDP contracted by approx. 6% at the same time exports contracted much more (collapse of tourism) during imports so instead. Reasons (all changes here refer to relative changes) that the contraction in GDP was much smaller than the deteriorating balance in foreign trade in goods and service was to: (1) Two of the others are correct. (2) Changes in inventories increased when exports were made that were not produced during the year. (3) Private consumption, C collapsed and this meant that GDP contracted less than balance of exports and imports. (4) The government assisted the economy and contributed to increasing GDP by reducing public consumption, G. (4) National expenditure did not decline as much as GDP, which offset much contraction in the balance of exports and imports.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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