Figure 23-2
-Refer to Figure 23-2. If the U.S. economy is currently at point K, which of the following could cause it to move to point N?
A) The price level in the United States falls relative to the price level in other countries.
B) Congress abolishes investment tax incentives.
C) The interest rate rises.
D) Household wealth declines.

Question

Figure 23-2 
-Refer to Figure 23-2. If the U.S. economy is currently at point K, which of the following could cause it to move to point N?
A) The price level in the United States falls relative to the price level in other countries. 
B) Congress abolishes investment tax incentives. 
C) The interest rate rises. 
D) Household wealth declines.

Quizplus · Accepted Answer

If the price level in the United States falls relative to other countries, U.S. goods become relatively cheaper, increasing exports and aggregate demand, potentially moving the economy from point K to point N.

Figure 23-2 -Refer to Figure 23-2. If the U.S. Economy Is Currently