In the open-economy macroeconomic model, net exports equal the quantity of dollars demanded in the foreign-currency exchange market.

Question

Quizplus · Accepted Answer

Net exports represent the difference between a country's exports and imports, and this value is reflected in the foreign-currency exchange market as the quantity of dollars demanded by foreign buyers. Therefore, net exports are equal to the quantity of dollars demanded in the foreign-currency exchange market, making statement A true.

In the Open-Economy Macroeconomic Model, Net Exports Equal the Quantity