When national income in other nations decreases, aggregate demand in our economy
A) increases because our exports will increase.
B) decreases because our exports will decrease.
C) increases because our imports will decrease.
D) decreases because our imports will increase.

Question

Quizplus · Accepted Answer

When national income in other nations decreases, their purchasing power decreases, which means they are less likely to buy goods from other countries, including ours. This decrease in exports will lead to a decrease in aggregate demand in our economy.

When National Income in Other Nations Decreases, Aggregate Demand in Our