Which of the following would be true if the exports of a country fell more than its imports?
A)The country's budget deficit would decrease.
B)The country's aggregate supply would increase.
C)The country's aggregate demand would decrease.
D)The country's aggregate demand would increase.
E)The country's aggregate demand would remain unaffected.

Question

Quizplus · Accepted Answer

A fall in exports means a decrease in the country's income from external sources, which would reduce its aggregate demand. If imports fall less than exports, it would increase the country's net exports, which would boost aggregate demand. However, if imports fall at a greater rate than exports, it would lead to a decrease in aggregate demand.

Which of the Following Would Be True If the Exports