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QUESTION 1 increases the volume of imports in an economy. A decrease in the price of domestic goods and services. O An increa

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Answer #1

1. An increase in national income will make people be able to spend more on imported goods. Therefore, they will import more and the volume of imports in the economy will increase.

A decrease in national income will have the opposite effect. An increase in the price of foreign goods and services will make foreign goods more costly. And therefore, import will decrease. A decrease in the price of domestic goods and services will cause people to buy more of domestic goods and less of foreign goods. Therefore, this will also decrease import.

Answer: option B

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