Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its ʺ... factories have been exposed to ... competition from China, India and other Asian mass producers.ʺ As a result, ʺthe main export industry has seen a 30 per cent reduction in volume ...ʺ
The decrease in exports represents a change in __________expenditure and will cause __________.
A) autonomous; a downward shift in the AE curve and a leftward shift in the AD curve
B) induced; an upward shift in the AE curve and a leftward shift in the AD curve
C) induced; a downward shift in the AE curve and a leftward shift in the AD curve
D) autonomous; a downward shift in the AE curve and a rightward shift in the AD curve
Correct Answer:
Verified
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A)
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