What would be the impact on aggregate demand (AD)if exports and imports both rose,but exports rose more than imports?
A)AD could either increase or decrease.
B)AD would increase.
C)AD would be unaffected.
D)AD would decrease.

Question

Quizplus · Accepted Answer

If exports rise more than imports, it means that net exports (exports minus imports) have increased. This will increase aggregate demand, as net exports are a component of AD. Therefore, choice B is the correct answer.

What Would Be the Impact on Aggregate Demand (AD)if Exports