Consider the net export function.Suppose exports are $200 and imports are given by IM = 0.2Y.At what level of national income will net exports equal zero?
A)$0
B)$200
C)$250
D)$1000
E)$1250

Question

Quizplus · Accepted Answer

Net exports equal zero when exports equal imports. Given exports are $200 and imports are IM = 0.2Y, setting exports equal to imports gives $200 = 0.2Y. Solving for Y gives Y = $1000.

Consider the Net Export Function