Consider the relationship between the AE curve and the AD curve.A decline in the amount of desired net exports at each level of national income
A)shifts the AD curve to the right.
B)shifts the AD curve to the left.
C)causes a movement up along the AD curve.
D)causes a movement down along the AD curve.
E)causes an upward shift of the AE curve but no movement of the AD curve.

Question

Quizplus · Accepted Answer

A decline in the amount of desired net exports at each level of national income means a decrease in the foreign demand for goods and services, which reduce the total demand for goods and services in the economy. Therefore, it shifts the AD curve to the left.

Consider the Relationship Between the AE Curve and the AD