Whereas exports vary with the domestic income level in the economy, imports depend on the income level of the economy's trading partners.

Question

Quizplus · Accepted Answer

Exports depend on the income level of the economy's trading partners, as higher income abroad increases demand for a country's goods and services. Conversely, imports vary with the domestic income level, as higher domestic income increases demand for foreign goods and services.

Whereas Exports Vary with the Domestic Income Level in the Economy