-Suppose the economy is at point B. If a recession in another country decreases exports, to what point might economy move in the short run?
A) It shifts to a point such as C.
B) It shifts to a point such as A.
C) It stays at point B.
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

Question

-Suppose the economy is at point B. If a recession in another country decreases exports, to what point might economy move in the short run?
A) It shifts to a point such as C. 
B) It shifts to a point such as A. 
C) It stays at point B. 
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

Quizplus · Accepted Answer

The Answer of 
-Suppose the economy is at point B. If a recession in another country decreases exports, to what point might economy move in the short run?
A) It shifts to a point such as C. 
B) It shifts to a point such as A. 
C) It stays at point B. 
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.

-Suppose the Economy Is at Point B