Other Things Equal, an Increase in an Economy's Exports Will

question 122

Multiple Choice

Other things equal, an increase in an economy's exports will

• A) lower the marginal propensity to import.
• B) have no effect on domestic GDP because imports will change by an offsetting amount.
• C) decrease its domestic aggregate expenditures and therefore decrease its equilibrium GDP.
• D) increase its domestic aggregate expenditures and therefore increase its equilibrium GDP.