An increase in net exports can be expected to shift the:
A)aggregate expenditures curve upward and the aggregate demand curve rightward.
B)aggregate expenditures curve upward and the aggregate demand curve leftward.
C)aggregate expenditures curve downward and the aggregate demand curve rightward.
D)aggregate expenditures curve downward and the aggregate demand curve leftward.

Question

Quizplus · Accepted Answer

An increase in net exports means that there is an increase in the demand for a country's goods and services from other countries. This leads to an increase in aggregate expenditures, as there is an increase in demand for domestic goods and services. Therefore, the aggregate expenditures curve shifts upward. This increase in demand also leads to an increase in the overall demand for goods and services in the economy, which leads to an increase in the aggregate demand curve as well, thus shifting the curve rightward.

An Increase in Net Exports Can Be Expected to Shift