Other things being equal,a decrease in an economy's exports will
A)increase domestic aggregate expenditures and the equilibrium level of output
B)decrease domestic aggregate expenditures and the equilibrium level of output
C)have no impact on domestic aggregate expenditures or output
D)decrease the marginal propensity to import
E)change autonomous consumption

Question

Quizplus · Accepted Answer

A decrease in exports means that there is a decrease in foreign demand for domestic goods. This will lead to a decrease in domestic aggregate expenditures and in turn, a decrease in the equilibrium level of output.

Other Things Being Equal,a Decrease in an Economy's Exports Will