Suppose that the U.S.trade balance is positive.Hence, when the net export function is added to C+I+G, the slope of the U.S.aggregate expenditures function will become steeper.

Question

Quizplus · Accepted Answer

When the net export function is added to C+I+G, it increases the level of aggregate expenditures at every level of income. This results in a steeper slope for the aggregate expenditures function, indicating a greater change in GDP resulting from a change in autonomous spending. Therefore, if the U.S. trade balance is positive, meaning that the value of exports exceeds the value of imports, the addition of net exports to the aggregate expenditures function would increase the slope, making option A true.

Suppose That the U