If net exports is a negative number, the government sector must________ if the private sector is in a ________ .

Question

If net exports is a negative number, the government sector must________  if the private sector is in a ________ .

Quizplus · Accepted Answer

If net exports is negative, it means the country is importing more than it is exporting, which reduces the overall demand for domestic products and services. If the private sector is in a surplus, it means that it is saving more than it is investing or consuming, which leads to a reduction in overall demand in the economy. To offset this reduction in demand and maintain economic growth, the government must increase its spending and run a deficit.

If Net Exports Is a Negative Number, the Government Sector