If consumers increase their preference for foreign goods and services, aggregate expenditure will likely:
A) increase.
B) decrease.
C) remain constant.
D) increase at first and then decrease.

Question

Quizplus · Accepted Answer

When consumers increase their preference for foreign goods and services, domestic spending decreases as more money flows out of the country to purchase these foreign goods and services. This leads to a decrease in aggregate expenditure within the domestic economy.

If Consumers Increase Their Preference for Foreign Goods and Services