When net exports equal zero,the economy is in macroeconomic equilibrium.

Question

Quizplus · Accepted Answer

Macro equilibrium is achieved when total aggregate demand is equal to total aggregate supply. Net exports are only one component of aggregate demand, which includes consumption, investment, and government spending. Therefore, even if net exports are zero, the economy may not be in macroeconomic equilibrium if there are imbalances in the other components of aggregate demand or supply.

When Net Exports Equal Zero,the Economy Is in Macroeconomic Equilibrium