If our exports of final goods and services increase more than our imports,other things being equal,how will aggregate demand be affected?
A)It will be negative.
B)It will increase.
C)It will decrease by the change in net exports.
D)It will stay the same.

Question

Quizplus · Accepted Answer

An increase in exports of final goods and services means an increase in net exports which increases aggregate demand. This is because when exports increase, there is an increase in demand for domestically produced goods and services which in turn leads to an increase in output, income, and employment.

If Our Exports of Final Goods and Services Increase More