At the equilibrium GDP for an open economy:
A)net exports may be either positive or negative.
B)imports will always exceed exports.
C)exports will always exceed imports.
D)exports and imports will be equal.

Question

Quizplus · Accepted Answer

At the equilibrium GDP for an open economy, net exports (exports minus imports) may be either positive or negative, depending on various factors such as exchange rates, domestic income levels, and foreign income levels. Therefore, options B, C, and D are incorrect as they suggest a fixed relationship between imports and exports.

At the Equilibrium GDP for an Open Economy