A decrease in foreign income ________ exports of U.S.-made goods,so aggregate demand ________ and the aggregate demand curve shifts ________.
A)increases;increases;rightward
B)decreases;decreases;leftward
C)decreases;increases;rightward
D)increases;increases;leftward
E)decreases;decreases;rightward

Question

Quizplus · Accepted Answer

A decrease in foreign income would result in a decrease in exports of U.S.-made goods, which would then lead to a decrease in aggregate demand. This is because the decrease in foreign income would negatively impact the purchasing power of foreign customers, leading to a decrease in demand for U.S. goods. Thus, the aggregate demand curve would shift leftward.

A Decrease in Foreign Income ________ Exports of U