An increase in real disposable income will:
A)increase the value of net exports of a country.
B)decrease the value of net exports of a country.
C)increase government purchases.
D)decrease government purchases.
E)increase net taxes.

Question

Quizplus · Accepted Answer

An increase in real disposable income typically leads to an increase in consumption, including that of imported goods. This can lead to a decrease in the value of net exports of a country, as imports increase relative to exports.

An Increase in Real Disposable Income Will