If tastes for foreign goods and services go up, then we would expect aggregate expenditure to:
A) increase.
B) decrease.
C) remain constant.
D) increase and then sharply decrease more.

Question

Quizplus · Accepted Answer

If tastes for foreign goods and services increase, domestic consumers will spend more on imports, leading to a decrease in aggregate expenditure on domestic goods and services.

If Tastes for Foreign Goods and Services Go Up, Then