U.S.import spending is not affected by U.S.real income but is influenced by the economic activity of its major trading partners and the exchange rate,hence import spending is taken as autonomous.

Question

Quizplus · Accepted Answer

The statement is incorrect. U.S. import spending is actually affected by U.S. real income, as a higher real income leads to increased consumer spending and demand for imports. However, economic activity of trading partners and exchange rates also play a role in determining import spending. Therefore, it cannot be considered as autonomous.

USImport Spending Is Not Affected by U