Figure 19-1

Of the graphs in Figure 19-1, which one shows the effects of an economic boom in the United States and a depreciation of the dollar?

Question

Figure 19-1

Of the graphs in Figure 19-1, which one shows the effects of an economic boom in the United States and a depreciation of the dollar?

Quizplus · Accepted Answer

In graph 2, an economic boom in the United States is shown by an increase in aggregate demand (AD) resulting in higher output (Y) and higher price levels (P). Additionally, a depreciation of the dollar is shown by a shift in the net export (NX) curve to the right, resulting in an increase in net exports and an overall increase in output and price levels.

Figure 19-1 of the Graphs in Figure 19-1, Which One Shows the One