If the national incomes of our trading partners increase, then our:
A) Aggregate demand decreases because C decreases
B) Aggregate demand increases because C increases
C) Aggregate demand decreases because net exports decrease
D) Aggregate demand increases because net exports increase

Question

Quizplus · Accepted Answer

If the national incomes of our trading partners increase, it means they will have more money to spend and therefore their demand for our products will increase. This will result in an increase in our net exports, leading to an increase in aggregate demand in our country.

If the National Incomes of Our Trading Partners Increase, Then