Question

When the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy, which of the following increases?

1) gdp
2) pci
3) ppp
4) pep

Answer 1

The indicator that increases when domestic exports exceed the value of imports is the Gross Domestic Product (GDP), which measures the dollar value of all goods and services produced in an economy.

Step-by-step explanation:

When a nation's total exports surpass its imports, a trade surplus occurs, positively impacting the Gross Domestic Product (GDP). GDP, representing the monetary value of all goods and services produced within a country's borders, is augmented by the excess of domestically produced exports over foreign goods and services consumed domestically. This surplus signals that more capital is flowing into the country than leaving it through international transactions.

The trade surplus contributes to economic strength by bolstering the national economy with additional funds. This positive balance of trade fosters economic growth, job creation, and increased investment. Additionally, a trade surplus can enhance a nation's overall financial stability, as the influx of money from successful exports surpasses the expenditure on imports, ultimately fortifying the economic foundation of the country.