Multiple Select Question

Select all that apply

Select all of the following factors which can cause net exports to change.
Multiple select question.

Changes in exchange rates

Changes in national income abroad

Changes in price level

Changes in interest rates

1 answer

All of the following factors can cause net exports to change:

  • Changes in exchange rates: Fluctuations in exchange rates can affect the competitiveness of a country's goods and services, thereby impacting exports and imports.

  • Changes in national income abroad: When national income in other countries rises, demand for exports may increase, affecting net exports positively.

  • Changes in price level: If a country's price level rises relative to other countries, its goods may become more expensive for foreign buyers, potentially reducing exports and increasing imports, thus affecting net exports.

  • Changes in interest rates: Changes in interest rates can influence capital flows and exchange rates, which in turn can impact net exports. Higher interest rates may strengthen a country's currency and affect export competitiveness.

Therefore, all the options listed can cause changes in net exports.