The net export function illustrates that:
A) net exports are a positive function of domestic income.
B) net exports are independent of domestic income.
C) net exports are a negative function of domestic income.
D) exports are a negative function of foreign income.
E) exports are independent of foreign income.

Question

Quizplus · Accepted Answer

The net export function shows that net exports are a negative function of domestic income. This means that as domestic income increases, the demand for imports also increases while the demand for exports decreases. Therefore, net exports decrease as domestic income increases.

The Net Export Function Illustrates That