An increase in net exports would lead to an increase aggregate demand but would not lead to an increase in aggregate supply.

Question

Quizplus · Accepted Answer

An increase in net exports would mean that there is a higher demand for a country's goods and services from other countries. This would lead to an increase in aggregate demand as there would be more spending on goods and services in the economy. However, it would not lead to an increase in aggregate supply as net exports only affect the demand side of the equation and not the supply side.

An Increase in Net Exports Would Lead to an Increase