Question

Positive net exports increase aggregate expenditures beyond what they would be in a closed economy and thus have an expansionary effect on domestic GDP.
Select one:
a. True
b. False

Answer 1

Answer:

TRUE

Explanation:

The given statement is TRUE.

Positive net export increase aggregate expenditure as the demand increases the production increases and to full fill the production demand we need to spend more money this increases expenditure beyond what would have been in a closed economy.

If the net export increases this act as an expansionary effect on the GDP.  

More the export of the country more will be the growth of the GDP of a country.