Suppose the Rest of the World Experiences a Recession That

Multiple Choice

Suppose the rest of the world experiences a recession that causes a decrease in foreign income. From the domestic economy's perspective, this foreign income decrease will cause which of the following as the domestic economy adjusts to the fall in foreign income?

A) A decrease in domestic income and a decrease in imports.
B) A decrease in imports and an increase in net exports.
C) The net exports line to shift up.
D) An increase in net exports.
E) An increase in the demand for domestic goods.