Which of the following conditions must be satisfied for the demand for domestic goods to be equal to the domestic demand for goods?

Question

Quizplus · Accepted Answer

The equation X = IM/s represents the condition for domestic demand to equal domestic production. X represents domestic demand, IM represents imports, and s represents the domestic price level relative to the foreign price level. When the domestic price level increases relative to the foreign price level (s increases), domestic demand for imports decreases, which increases domestic production (X). Therefore, when X = IM/s, domestic demand for goods is equal to domestic production.

Which of the Following Conditions Must Be Satisfied for the Demand