Net exports, in general, are
A) positively correlated with the real exchange rate.
B) positively correlated with real income.
C) positively correlated with the domestic price index.
D) negatively correlated with the price index of the rest of the world.
E) none of the above.

Question

Quizplus · Accepted Answer

Net exports are generally negatively correlated with the real exchange rate and the domestic price index, and not necessarily correlated in a simple way with real income or the price index of the rest of the world. The correct relationships involve more nuances than the options provided.

Net Exports, in General, Are