If net exports decline from zero to some negative amount, the aggregate expenditures schedule would
A) shift upward.
B) shift downward.
C) not move. (Net exports do not affect aggregate expenditures.)
D) become steeper.

Question

Quizplus · Accepted Answer

A decline in net exports means that there is a decrease in spending on exports, which would shift the aggregate expenditures schedule downward. This is because there is now less overall spending in the economy, which will result in a lower level of output and income.

If Net Exports Decline from Zero to Some Negative Amount