If exports and imports both fell, but exports fell less than imports,
A)AD would decrease.
B)AD would increase.
C)AD would be unaffected.
D)AD could either increase or decrease.

Question

If exports and imports both fell, but exports fell less than imports,
A)​AD would decrease.
B)​AD would increase.
C)​AD would be unaffected.
D)​AD could either increase or decrease.

Quizplus · Accepted Answer

When exports fall less than imports, it means the country is exporting more relative to its imports than before, which can lead to an increase in aggregate demand (AD) as the net exports component of AD improves.

If Exports and Imports Both Fell, but Exports Fell Less