An increase in net exports due to a change in the exchange rate will shift aggregate demand
A) left by the amount of the initial increase in net exports.
B) right by the amount of the initial increase in net exports.
C) left by the amount of the initial change in net exports * the multiplier.
D) right by the amount of the initial increase in net exports *the multiplier.

Question

Quizplus · Accepted Answer

An increase in net exports due to a change in the exchange rate will shift aggregate demand to the right by the amount of the initial increase in net exports multiplied by the multiplier effect, as it leads to an increase in overall economic activity.

An Increase in Net Exports Due to a Change in the Exchange