If a country exports more than it imports:
A)net exports will increase, causing aggregate expenditure to rise and leading to an increase in equilibrium GDP.
B)net exports will decrease, causing aggregate expenditure to fall and leading to a decrease in equilibrium GDP.
C)aggregate expenditure is not affected in the long run.
D)aggregate expenditure will rise, leading to an increase in equilibrium GDP.

Question

Quizplus · Accepted Answer

When a country exports more than it imports, it has a positive net exports figure. This means that there is an increase in the demand for the country's goods and services from other countries, which will lead to an increase in aggregate expenditure. As a result, equilibrium GDP will increase.

If a Country Exports More Than It Imports