Question

other things being equal, a decrease in an economy's exports will: select one: a. increase domestic aggregate expenditures and the equilibrium level of gdp b. decrease domestic aggregate expenditures and the equilibrium level of gdp c. increase the amount of imports consumed by the private sector d. have no effect on domestic gdp because imports will offset the change in exports

Answer 1

The decrease in an economy's exports will decrease domestic aggregate expenditures and the equilibrium level of GDP. Therefore, the correct option is B.

Step-by-step explanation:

The correct answer is b. decrease domestic aggregate expenditures and the equilibrium level of gdp.

When an economy's exports decrease, it means that there is a reduction in the amount of goods and services being sold to other countries. This decrease in exports leads to a decrease in domestic aggregate expenditures, as there is less demand for goods and services from foreign buyers. As a result, the equilibrium level of GDP, which represents the total value of goods and services produced in the economy, will also decrease.