A reduction in U.S net exports would shift U.S. aggregate demand
A)rightward. In an attempt to stabilize the economy, the government could raise taxes.
B)rightward. In an attempt to stabilize the economy, the government could cut taxes.
C)leftward. In an attempt to stabilize the economy, the government could raise taxes.
D)leftward. In an attempt to stabilize the economy, the government could cut taxes.

Question

Quizplus · Accepted Answer

A reduction in U.S. net exports decreases aggregate demand, shifting it leftward. To stabilize the economy, the government could cut taxes to increase disposable income and boost consumption, counteracting the decrease in demand.

A Reduction in U