Other things being equal, a decrease in an economy's exports will:
A) Increase domestic aggregate expenditures and the equilibrium level of GDP
B) Decrease domestic aggregate expenditures and the equilibrium level of GDP
C) Have no effect on domestic GDP because imports will offset the change in exports
D) Increase the amount of imports consumed by the private sector

Question

Quizplus · Accepted Answer

A decrease in exports will lower foreign demand for a country's goods and services, reducing the country's production and income, resulting in lower domestic aggregate expenditure and GDP.

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