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 C 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 C to B?

Quizplus · Accepted Answer

An appreciation of the dollar would cause a movement from C to B, as it would decrease net exports (X-IM) and shift the aggregate expenditure function downwards.

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