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State with Reason Whether You Agree Or Disagree with the Following Statement. Positive Net Earnings from Foreign Transactions Add to Aggregate Demand.

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Question

State with reason whether you agree or disagree with the following statement.

Positive net earnings from foreign transactions add to aggregate demand.

Answer in Brief
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Solution

Positive income from foreign transactions implies that the income of the people increases. Aggregate demand is a direct function of the net positive income earnings from foreign transactions. As such income increases the aggregate demand also increases.  

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Chapter 10: Determinants of Aggregates - Exercise 5 [Page 94]

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Micheal Vaz Economics [English] 12 Standard HSC
Chapter 10 Determinants of Aggregates
Exercise 5 | Q 1.3 | Page 94

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