Figure 36-9

-In Figure 36-9, the C + I + G + (X − IM)1 line is flatter than the C + I + G + (X − IM)0 line because the

Question

Figure 36-9
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-In Figure 36-9, the C + I + G + (X − IM)1 line is flatter than the C + I + G + (X − IM)0 line because the

Quizplus · Accepted Answer

The (X − IM)1 line indicating that net exports decline as GDP rises would lead to a flatter aggregate demand curve because it suggests that as the economy grows, the increase in imports (IM) relative to exports (X) dampens the impact of GDP growth on net exports, thus flattening the curve.

Figure 36-9 ​ ​

Figure 36-9