Figure 12.3

-Which of the graphs in Figure 12.3 best describes the impact of lower real income in Germany on U.S. equilibrium income and the U.S. equilibrium price level?
A) A
B) B
C) C
D) D
E) E

Question

Figure 12.3
 
-Which of the graphs in Figure 12.3 best describes the impact of lower real income in Germany on U.S. equilibrium income and the U.S. equilibrium price level?
A) A 
B) B 
C) C 
D) D 
E) E

Quizplus · Accepted Answer

Lower real income in Germany would lead to a decrease in German imports from the U.S., reducing U.S. exports. This would shift the U.S. aggregate demand curve to the left, leading to a lower equilibrium income and a lower price level in the U.S., which is depicted by graph C.

Figure 12.3 -Which of the Graphs in Figure 12.3 Best Describes the 12.3