In an open economy, the factors that affect net exports include the following EXCEPT:
A)consumer tastes for domestic and foreign goods
B)exchange rate to purchase foreign goods
C)domestic and international prices
D)tariffs on imported goods

Question

Quizplus · Accepted Answer

Tariffs on imported goods do not affect net exports in an open economy.
Key Takeaway: Net exports of a country with an open economy are affected by a number of factors that include the type of domestic and foreign goods that consumers are attracted to. When consumers wish to buy foreign goods, exchange rates are a big factor in whether they can afford them or not. Domestic and international prices are also a factor in net exports.

In an Open Economy, the Factors That Affect Net Exports