ʺThe global financial crisis has had a considerable impact on Chinaʹs export growth, which will continue to show weakness with recession in the U.S. and Europe,ʺ said a report by JP Morgan & Co.
If Chinese exports continue to decline, the AE curve will shift__________ , the price level will__________ In the long run and real GDP will __________in the long run.

Question

Quizplus · Accepted Answer

A decline in Chinese exports would decrease aggregate demand, shifting the AE curve downward. In the long run, the price level will decrease, but real GDP will not change due to the economy's self-correcting mechanism.

ʺThe Global Financial Crisis Has Had a Considerable Impact on Chinaʹs