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 A to B?

Question

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 A to B?

Quizplus · Accepted Answer

A depreciation of the dollar would cause an increase in net exports (X-IM) and therefore shift the aggregate expenditure function upward from A to B.

Figure 36-7 In Figure 36-7, There Are Three Aggregate Expenditure Functions