An increase in the U.S.price level relative to the price level of U.S.trading partners will cause the aggregate expenditures function in the United States to
A)shift up.
B)shift down.
C)get flatter.
D)get steeper.

Question

Quizplus · Accepted Answer

An increase in the price level will cause a decrease in net exports as imports become relatively cheaper and exports become relatively more expensive. This decrease in net exports will cause a decrease in aggregate expenditures and shift the aggregate expenditures function down.

An Increase in the U