Increased due the large defense spending

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Reference no: EM13771006

Nepal as a small open economy declared war on Germany on 4 September 1939, in which its government purchases increased and the rest of the world's government purchases also increased due the large defense spending. Then, for Nepal, holding others things constant, which of the following should be correct in the long run (WWII lasted for 6 years from 1939 to 1945)?

A. net exports should decrease.

B. net exports should increase.

C. net exports should remain the same.

D. it depends.

Reference no: EM13771006

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