A shift in tastes toward Canadian goods ________ net exports in Canada and causes the IS curve to shift to the ________ in Canada, everything else held constant.

Question

Quizplus · Accepted Answer

A shift in tastes toward Canadian goods increases net exports in Canada, which in turn increases aggregate demand. This is represented by a rightward shift of the IS curve in the context of the IS-LM model.

A Shift in Tastes Toward Canadian Goods ________ Net Exports