An economic recession in Japan will cause the aggregate demand curve in the United States to shift to the right.

Question

Quizplus · Accepted Answer

A recession in Japan is likely to lead to a decrease in its imports from the United States, thereby reducing the U.S. export demand and potentially decreasing the aggregate demand. Therefore, the aggregate demand curve in the United States would shift to the left, not to the right.

An Economic Recession in Japan Will Cause the Aggregate Demand