Other things being equal, a decrease in an economy's exports will
A)increase domestic aggregate expenditures and the equilibrium level of GDP.
B)decrease domestic aggregate expenditures and the equilibrium level of GDP.
C)have no effect on domestic GDP, because imports will offset the change in exports.
D)increase the amount of imports consumed by the private sector.

Question

Quizplus · Accepted Answer

A decrease in exports reduces the total demand for a country's goods and services, leading to a decrease in domestic aggregate expenditures and a lower equilibrium level of GDP.

Other Things Being Equal, a Decrease in an Economy's Exports