The United States imports approximately $45 billion in automobiles from Japan. If there is a recession in the United States, we can expect
A) that aggregate demand in Japan will increase.
B) that aggregate demand in Japan will decrease.
C) that aggregate demand in Japan will remain the same.
D) that Japan will have no aggregate demand.

Question

Quizplus · Accepted Answer

If there is a recession in the United States, the demand for automobiles will decrease, which will negatively affect the Japanese auto industry since they export a significant portion of their vehicles to the United States. As a result, the aggregate demand in Japan is likely to decrease.

The United States Imports Approximately $45 Billion in Automobiles from Japan