How does the level of imports change over the business cycle?
A) imports tend to fall during expansions and rise during contractions.
B) imports tend to rise during expansions and fall during contractions.
C) remain fairly constant over the business cycle.
D) imports tend to fall during expansions and remain flat during a contraction.

Question

Quizplus · Accepted Answer

During expansions, there is an increase in consumer spending and business investment, leading to an increase in demand for foreign goods and services, thus increasing imports. During contractions, there is a decrease in consumer spending and business investment, leading to a decrease in demand for foreign goods and services, thus decreasing imports.

How Does the Level of Imports Change Over the Business