Suppose the U.S. is a major importer of Japanese automobiles. All other things unchanged, a Jdecrease in subsidies granted by the Japanese governments to its auto manufacturers will

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Quizplus · Accepted Answer

A decrease in subsidies to Japanese auto manufacturers would likely increase the cost of Japanese automobiles, reducing U.S. imports of these cars. This would increase U.S. net exports, shifting the aggregate demand curve to the right.