What happens to the value of net exports as national income increases?
A)It increases because the level of imports increases.
B)It decreases because the level of imports decreases.
C)It increases because the level of imports decreases.
D)It decreases because the level of imports increases.
E)It is not affected by the level of national income.

Question

Quizplus · Accepted Answer

As national income increases, the level of imports will also increase because people have more money to spend on goods and services, including imports. This will lead to a decrease in the value of net exports, as the level of imports increases and the level of exports remains relatively constant. Therefore, choice D is the best answer.

What Happens to the Value of Net Exports as National