If all other factors are held constant,an increase in imports
A)causes an increase in exports of the same size.
B)causes GDP to increase.
C)causes GDP to decrease.
D)can cause GDP to increase or decrease,depending on whether the imports are purchased by consumers or by business firms.

Question

Quizplus · Accepted Answer

An increase in imports means more money is leaving a country to purchase goods from abroad. This decreases the amount of money circulating within the country and can lead to a decrease in GDP.

If All Other Factors Are Held Constant,an Increase in Imports