An increase in foreign incomes
A) increases aggregate demand in the United States.
B) increases the aggregate quantity demanded in the United States.
C) decreases the aggregate quantity demanded in the United States.
D) decreases aggregate demand in the United States.

Question

Quizplus · Accepted Answer

An increase in foreign incomes leads to higher demand for U.S. exports, which in turn increases the aggregate demand in the United States as U.S. goods and services become more attractive to foreign buyers with higher incomes.

An Increase in Foreign Incomes