Which of the following best describes the linkages between the foreign sector (exports and imports) and the domestic economy?

Question

Accepted Answer

Exports are an injection/addition, while imports are a leakage/withdrawal from the economy.

Answer

The domestic economy does not benefit from interacting with the foreign sector.

Answer

The flow of income and spending on exports and imports describes activity in the real sector.

Answer

There is no relationship between households and the foreign sector.

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