If net exports increases, but neither government expenditure nor net taxes change, saving must increase.

Name: If net exports increases, but neither government expenditure nor net taxes change, saving must increase.
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Question

Quizplus · Accepted Answer

If net exports increase, it means that exports have increased more than imports. This means that there is more money flowing into the country than flowing out. If government expenditure and net taxes do not change, then the only way for this to happen is if saving increases.

If Net Exports Increases, but Neither Government Expenditure nor Net