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If the Domestic Income of a Nation's Citizens Increase Thus

Question 57

Multiple Choice

If the domestic income of a nation's citizens increase thus causing consumption spending to increase, then we generally expect net export spending to:


A) increase as well because as consumption increases we also buy more foreign goods and services.
B) decrease as well because as consumption increases we also buy more foreign goods and services.
C) remain constant because when we increase domestic purchases it is directly offset by a reduction in foreign purchases.
D) there is not enough information to determine what would happen.

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