A rise in the incomes of foreign consumers, everything else remaining unchanged, causes net exports to
A)decline.
B)not change.
C)rise.
D)rise at first, then decline later.

Question

Quizplus · Accepted Answer

A rise in the incomes of foreign consumers will increase their purchasing power, leading to an increase in demand for goods and services produced by the domestic country. This, in turn, will lead to an increase in exports, resulting in a rise in net exports.

A Rise in the Incomes of Foreign Consumers, Everything Else