If a nation's imports exceed its exports:
A)net exports will be positive.
B)GDP will be less than the sum of consumption, investment, and government purchases.
C)GDP will be greater than the sum of consumption, investment, and government purchases.
D)none of the above apply.

Question

If a nation's imports exceed its exports:
A)​net exports will be positive.
B)​GDP will be less than the sum of consumption, investment, and government purchases.
C)​GDP will be greater than the sum of consumption, investment, and government purchases.
D)​none of the above apply.

Quizplus · Accepted Answer

If a nation's imports exceed its exports, it means that it is running a trade deficit, which will lead to a decrease in net exports. This would lead to a decrease in GDP, making it less than the sum of consumption, investment, and government purchases. Therefore, option B is correct. Option A is incorrect because net exports will be negative in this case. Option C is incorrect because it would only be possible if there were some other factor contributing to an increase in GDP.

If a Nation's Imports Exceed Its Exports