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)imports are independent of domestic income.
E)exports are independent of foreign income.

Question

Quizplus · Accepted Answer

The net export function is commonly assumed to be a negative function of domestic income (i.e., as domestic income increases, the demand for imports also increases, reducing net exports). Therefore, option C is the best choice as it states that net exports are a negative function of domestic income.

The Net Export Function Illustrates That