Question

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

Answer 1

If the government increases spending and net exports increase, this means the economy is growing as well as profits

Answer 2

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.