In a simple macro model,the net export (NX)function indicates a ________ relationship between net exports and ________.
A)positive; exports
B)positive; domestic national income
C)negative; imports
D)negative; domestic national income
E)negative; foreign national income

Question

Quizplus · Accepted Answer

The net export (NX) function typically indicates a negative relationship between net exports and domestic national income. As domestic national income increases, imports tend to increase (since people have more income to spend on foreign goods), which reduces net exports.

In a Simple Macro Model,the Net Export (NX)function Indicates a ________