Aggregate demand will increase if ?
Correct answer: D. imports fall
- A. consumption falls
- B. investment falls
- C. Exports fall
- D. imports fall
Explanation
Aggregate demand equals consumption plus investment plus government spending plus exports minus imports. Therefore, falling imports increases net exports and raises aggregate demand.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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