As domestic income rises,net exports
A)fall,since exports remain the same but imports increase
B)rise,since exports remain the same but imports fall
C)fall,since exports are lower and imports remain the same
D)rise,since exports are higher and imports remain the same
E)may either rise or fall,since exports and imports change in opposite directions

Question

Quizplus · Accepted Answer

When domestic income rises, consumers tend to buy more goods and services, including imports. This leads to an increase in imports and thus, net exports fall. Therefore, the correct option is A.

As Domestic Income Rises,net Exports