"The global financial crisis has had a considerable impact on China's export growth, which will continue to show weakness with recession in the U.S. and Europe," said a report by JP Morgan & Co.
Www)money.cnn.com, 11/11/2008
If Chinese exports continue to decline, the AE curve will shift ________, the price level will ________ in the short run and real GDP will ________ in the short run.

Question

Quizplus · Accepted Answer

A decline in Chinese exports would shift the AE curve downward, resulting in a decrease in both price level and real GDP in the short run. This is because as exports decrease, aggregate expenditure and demand for goods and services in China decrease, causing a contraction in output and a decrease in prices.

"The Global Financial Crisis Has Had a Considerable Impact on China's