Consider the net export function. An increase in domestic national income, other things being equal, is assumed to cause
A)the net export function to pivot downward.
B)a move downward along the net export function.
C)the net export function to pivot upward.
D)no effect on net exports.
E)the net export function to shift upward.

Question

Quizplus · Accepted Answer

An increase in domestic national income would likely lead to an increase in imports as people have more disposable income. This would result in a reduction in net exports, causing a downward movement along the net export function.

Consider the Net Export Function