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When an American household purchases a bottle of Italian wine for $100, a. U.S. consumption does not change, U.S. net exports decrease by $100, and U.S. GDP decreases by $100. b. U.S. consumption does not change, U.S. net exports increase by $100, and U.S. GDP increases by $100. c. U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change.

User Sydney
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1 Answer

4 votes

Answer:

correct option is c

U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change

Step-by-step explanation:

we know here US purchases a bottle of Italian wine for $100

so as

if a person consumes goods then consumption will increase

and here goods is Italian wine so import will increases and as a result net export decreases

and GDP not include Net exports

and it takes into account only in domestic product so GDP does not change

so correct option is c

U.S. consumption increases by $100, U.S. net exports decrease by $100, and U.S. GDP does not change

User Md Nakibul Hassan
by
8.3k points

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