If exports and imports both rose, but exports rose more 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 rose, but exports rose more 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

If exports rise more than imports, it means there is a net increase in demand for the country's goods and services from other countries, which increases AD (aggregate demand). Therefore, AD would increase.

If Exports and Imports Both Rose, but Exports Rose More