Question

An increase in net exports causes GDP to increase. causes an increase in imports of the same size. can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable. causes GDP to decrease.

Answer 1

Answer:

GDP to increase

Explanation:

Gross domestic product (GDP) refers to the total value of goods and services produced within the boundaries of a nation. Its component are consumption, investment, government expenditure and net exports.

GDP = Y = Consumption + Investment + Government expenditure + Net exports

Net exports refers to the difference of total value of exports and total value of imports.

Net exports = Exports - Imports

Therefore, if there is an increase in the net exports then as a result the GDP of a nation increases.