If exports increase, then the aggregate expenditure curve shifts ________ and equilibrium expenditure ________.
A) upward; decreases
B) upward; increases
C) downward; decreases
D) downward; increases
E) upward; does not change

Question

Quizplus · Accepted Answer

When exports increase, it means that the country is selling more goods and services to other countries, which increases the country's income. This increase in income leads to an increase in aggregate expenditure, which shifts the aggregate expenditure curve upward. As a result, equilibrium expenditure also increases.

If Exports Increase, Then the Aggregate Expenditure Curve Shifts ________