Consider an economy where the total value of goods and services sold to other countries remains fixed. If this economy experiences a significant increase in its overall income, what is the direct and most likely effect on its trade balance (the value of its exports minus the value of its imports)?

Calculating a Country's Trade Balance

Relationship Between National Income and Net Exports

In an economy where the total value of goods and services sold to other countries is held constant, a decrease in the fraction of income that is spent on imported goods will, all else being equal, cause the country's trade balance (exports minus imports) to worsen (decrease).