As aggregate equilibrium income/output in the economy decreases, the trade balance is:?
(b) most likely to worsen.
(c) unlikely to be effected.
(d) Completely impossible to tell given this information.
Answer:
I think the trade balance would worse because if an economy's output is reduced it would have to charge higher per good thus reducing demand and income made from trade of this good. So i think its b.
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