Question

When spending and incomes in an economy increase, imports are likely to increase. imports are likely to be unchanged. exports are likely to decrease. imports are likely to decrease. Flag this Question

Answer 1

Answer:

imports are likely to increase

Explanation:

If an economy experiences an increase in income and expenditure, it means that the economy is undergoing a process of economic warming, that is, a time of rising consumption. In an open capitalist economy, consumption consists in the purchase of domestic or imported goods. Therefore, increased incomes and expenses will increase the importation of products.