Net exports are determined by
A) the real interest rate, the level of foreign real GDP, and national income.
B) the real exchange rate, the level of real GDP, and autonomous spending.
C) the real exchange rate, the level of foreign real GDP, and national income.
D) the nominal exchange rate, the level of foreign GDP, and national income.

Question

Quizplus · Accepted Answer

Net exports are influenced by the real exchange rate, which affects the competitiveness of a country's goods and services abroad, the level of foreign real GDP, which determines foreign demand for a country's exports, and national income, as higher national income can lead to increased imports, affecting the net export balance.

Net Exports Are Determined by