Figure 36-7

-In Figure 36-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from B to A?

Question

Figure 36-7
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-In Figure 36-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from B to A?

Quizplus · Accepted Answer

A recession in Southeast Asia would likely reduce demand for exports from the economy in question, leading to a decrease in aggregate expenditure and causing a movement from a higher level of aggregate expenditure (B) to a lower level (A).

Figure 36-7 ​

Figure 36-7