Positive net exports increase aggregate expenditures to a higher level than they would if the economy were
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Positive net exports increase aggregate expenditures to a higher level than they would if the economy were “closed”
to international trade. Negative net exports decrease aggregate expenditures relative to those in a closed economy, decreasing equilibrium real GDP by a multiple of their amount. Increases in exports or decreases in imports have an expansionary effect on real GDP, while decreases in exports or increases in imports have a contractionary effect.
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Related Book For
Economics Principles Problems And Policies
ISBN: 9780073511443
19th Edition
Authors: Campbell Mcconnell ,Stanley Brue ,Sean Flynn
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