An increase in the home country's income will result in a(n) _____ in the home country trade balance, and an increase in foreign income will result in a(n) _____ in the home country trade balance.
A) fall; fall
B) increase; increase
C) increase; fall
D) fall; increase

Question

Quizplus · Accepted Answer

An increase in the home country's income typically leads to more imports, worsening the trade balance, while an increase in foreign income leads to more exports from the home country, improving the trade balance.

An Increase in the Home Country's Income Will Result in A(n)