Answer to Question #43428 in Macroeconomics for Annita walker

Question

Explain how an increase in export affects the aggregate demand

Answer 1

Exports sold overseas are an inflow of demand into the circular flow of income in the economy and add to the demand for country's produced output. When export sales from the country are healthy, production in exporting industries will increase, adding both to national output and also the incomes of those people who work in these industries.