An increase in foreign incomes
A) decreases aggregate demand in the United States.
B) increases the aggregate quantity demanded in the United States.
C) decreases the aggregate quantity demanded in the United States.
D) increases aggregate demand in the United States.

Question

Quizplus · Accepted Answer

An increase in foreign incomes means that foreign consumers have more money to spend, which could lead to an increase in demand for goods and services produced in the United States. This would lead to an increase in net exports, and therefore an increase in aggregate demand in the United States.

An Increase in Foreign Incomes