Other things remaining the same, ________ in U.S.real GDP results in ________ in U.S.imports.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; no change
E) an increase; a decrease followed by no change

Question

Quizplus · Accepted Answer

As U.S. real GDP increases, individuals and firms in the U.S. have more disposable income to spend on goods and services, including imports. This leads to an increase in U.S. imports. Conversely, if U.S. real GDP were to decrease, overall consumption and demand for imports would also decrease. Therefore, the correct answer is A, as an increase in U.S. real GDP leads to an increase in U.S. imports.

Other Things Remaining the Same, ________ in U