Suppose the government increases its spending and that net exports increase. In 2 or 3 sentences, explain how these actions affect economic performance.

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Howard

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14 January, 19:02

Suppose the government increases its spending and that net exports increase. In 2 or 3 sentences, explain how these actions affect economic performance.

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Elliot Andrews · Answer 1

In general, if an increase in government spending leads to an increase in exports then this has a positive result on economic performance, since export revenues are greater--as long as these revenues are greater than the government spending.