State with reasons whether you agree or disagree with the following statements. 3) Positive net earnings from foreign transactions add to aggregate demand.

State with reasons whether you agree or disagree with the following statements.

3) Positive net earnings from foreign transactions add to aggregate demand.

Answer: 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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