If U.S.imports of goods and services exceed exports
A)GDP in the United States will be less than the sum of consumption,investment,and government purchases.
B)GDP in the United States will exceed the sum of consumption,investment and government purchases.
C)net exports for the United States are positive.
D)None of the choices are true.

Question

Quizplus · Accepted Answer

When imports exceed exports, it implies that net exports are negative, which means that the rest of the world is exporting more to the United States than the United States is exporting to them. Therefore, the GDP in the United States will be less than the sum of consumption, investment, and government purchases. This is because imports are subtracted from the GDP calculation, and the net effect is a decrease in the GDP.

If U.S.imports of Goods and Services Exceed Exports