An increase in foreign income, other things being equal, is assumed to cause the net export (NX)function to
A)shift parallel downward.
B)remain stationary.
C)pivot upward.
D)shift parallel upward.
E)pivot downward.

Question

Quizplus · Accepted Answer

An increase in foreign income is likely to cause an increase in demand for domestic goods and services, leading to an increase in exports and a shift upward in the net export function. The other choices do not accurately reflect this relationship.

An Increase in Foreign Income, Other Things Being Equal, Is