Which of the following scenarios would increase the net exports component of aggregate expenditure?
A) The dollar increases in value relative to other currencies.
B) Countries in the European Union experience a long period of economic growth.
C) A series of recalls for domestic automobiles shifts preferences towards foreign cars and trucks.
D) The United States experiences a long period of economic growth.

Question

Quizplus · Accepted Answer

When countries in the European Union experience a long period of economic growth, their increased income leads to higher demand for goods, including imports from the United States. This would increase U.S. exports, thereby increasing the net exports component of aggregate expenditure.

Which of the Following Scenarios Would Increase the Net Exports