A decrease in foreign incomes
A) increases aggregate demand in the United States.
B) decreases the aggregate quantity demanded in the United States.
C) increases the aggregate quantity demanded in the United States.
D) decreases aggregate demand in the United States.

Question

Quizplus · Accepted Answer

When foreign incomes decrease, they are likely to decrease their demand for U.S. goods and services, leading to a decrease in U.S. exports. This decrease in exports will decrease U.S. aggregate demand. Thus, option D is the correct answer.

A Decrease in Foreign Incomes