A change in foreign demand does not affect aggregate demand.

Question

Quizplus · Accepted Answer

A change in foreign demand can affect aggregate demand if the country in question is a significant trading partner. An increase in foreign demand for a country's goods and services can lead to an increase in exports, which in turn can increase the country's aggregate demand. On the other hand, a decrease in foreign demand can lead to a decrease in exports, which can lead to a decrease in aggregate demand. Therefore, a change in foreign demand can impact aggregate demand.

A Change in Foreign Demand Does Not Affect Aggregate Demand