Answer to Question #59381 in Macroeconomics for Ryan

Question

The U.S. and Canada are major trading partners. If GDP growth in the U.S. was smaller than GDP growth in Canada we should expect NX to
(a) Stay the same, since they are only driven by the exchange rate
(b) Increase since exports will grow more than imports
(c) Decrease since exports will grow less than imports
(d) Become equal to zero

Answer 1

(b) Increase since exports will grow more than imports