Consider the net export function.Suppose exports are $1850 and imports are given by IM = 0.13Y.At what level of national income will net exports equal zero?
A)$0
B)$277
C)$1573
D)$14 231
E)$27 750

Question

Quizplus · Accepted Answer

Net exports equal zero when exports equal imports. Given exports are $1850 and imports are IM = 0.13Y, setting exports equal to imports gives $1850 = 0.13Y. Solving for Y, Y = $1850 / 0.13 = $14,230.77. Rounding to the nearest whole number gives $14,231.

Consider the Net Export Function