Tariffs and trade wars cause net exports to ________ and real GDP to ________.
A)increase; increase
B)decrease; increase
C)increase; decrease
D)decrease; decrease

Question

Quizplus · Accepted Answer

Tariffs and trade wars typically lead to a decrease in net exports as other countries retaliate with their own tariffs, making exports more expensive and imports less attractive. This decrease in trade generally leads to a decrease in real GDP as the overall economic activity diminishes due to reduced international trade.

Tariffs and Trade Wars Cause Net Exports to ________ and Real