Which of the following will not cause net exports to decline?
A) An appreciation of the domestic currency
B) A fall in foreign income
C) Higher foreign tariffs on domestic goods
D) Lower foreign prices
E) None - all of these will cause net exports to decline.

Question

Quizplus · Accepted Answer

All the options listed (A through D) describe scenarios that would lead to a decline in a country's net exports. An appreciation of the domestic currency makes exports more expensive and imports cheaper, a fall in foreign income reduces demand for exports, higher foreign tariffs on domestic goods make exports less competitive, and lower foreign prices make foreign goods more attractive compared to domestic goods.

Which of the Following Will Not Cause Net Exports to Decline