Final answer:
The demand for US exports tends to increase when there is higher economic growth in the EU, a booming economy, and when US goods are relatively cheaper compared to goods made in other places.
Step-by-step explanation:
The demand for US exports tends to increase when certain factors occur. One factor is when there is higher economic growth in the European Union (EU), which increases the demand for US exports and reduces the trade deficit. This happens because higher EU growth leads to a rightward shift in the Aggregate Demand (AD) curve, causing an increase in Gross Domestic Product (GDP).
Another factor that increases the demand for US exports is a booming economy. When the economy is doing well, the demand for goods in general increases, including imports. If the trading partners' economies are also doing well, they will buy more US products, which leads to an increase in US exports.
Additionally, the relative prices of goods in domestic and international markets can also affect US exports. When US goods are relatively cheaper compared to goods made in other places, due to certain productivity breakthroughs, US exports are likely to rise. However, if US goods become relatively more expensive, perhaps due to a change in the exchange rate or the price of inputs, then exports from US producers are likely to decline.