A recession in the United States ________ the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n)________ output gap in Canada.
A)reduces; expansionary
B)increases; expansionary
C)reduces; recessionary
D)increases; recessionary

Question

Quizplus · Accepted Answer

A recession in the United States can easily spread around the world. In this case, the lower incomes in the United States result in reduced purchases from Canada and this creates a recessionary output gap in Canada.

A Recession in the United States ________ the Demand for Exports