Figure 20-9

-In Figure 20-9, the C + I + G + (X - IM)₁ line is flatter than the C + I + G + (X - IM)₀ line because the
A) (X - I
M)1 line indicates that net exports decline as GDP rises.
B) (X - I
M)1 line indicates that net exports rise as GDP rises.
C) multiplier is greater for the (X - I
M)1 line.
D) (X - I
M)1 line indicates that tariffs, quotas, and other trade barriers are keeping net exports below their full potential.

Question

Figure 20-9
 
-In Figure 20-9, the C + I + G + (X - IM)₁ line is flatter than the C + I + G + (X - IM)₀ line because the
A) (X - I
M)1 line indicates that net exports decline as GDP rises. 
B) (X - I
M)1 line indicates that net exports rise as GDP rises. 
C) multiplier is greater for the (X - I
M)1 line. 
D) (X - I
M)1 line indicates that tariffs, quotas, and other trade barriers are keeping net exports below their full potential.

Quizplus · Accepted Answer

The C + I + G + (X - IM)₁ line is flatter because net exports (X - IM) decline as GDP rises, reducing the slope of the aggregate expenditure line.

Figure 20-9 -In Figure 20-9, the C + I + G