Figure 20-7

-In Figure 20-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from A to B?

Question

Figure 20-7
 
-In Figure 20-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from A to B?

Quizplus · Accepted Answer

A depreciation of the dollar makes U.S. goods cheaper for foreign buyers, increasing exports and thus increasing aggregate expenditure, causing a movement from A to B.

Figure 20-7 -In Figure 20-7, There Are Three Aggregate Expenditure Functions (C