If Exports and Imports Both Rose, but Exports Rose More

question 98

Multiple Choice

If exports and imports both rose, but exports rose more than imports,

• A)AD would fall.
• B)AD would rise.
• C)AD would be unaffected.
• D)AD could either increase or decrease.

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Definitions:

Foreign-Currency Exchange

The exchange of currencies from various countries against one another.

Net Exports

The value of a country's total exports minus its total imports, representing the net spending on domestic goods and services by the rest of the world.

National Saving

The total amount of saving in a country, equal to the sum of private saving and public saving (or government surplus).

Domestic Investment

Domestic Investment involves the total spending on capital within a country, which includes the purchase of capital goods and investments in buildings and infrastructure.