Rafael lives in Miami,Florida,and like many Americans he is experiencing the effects of the U.S.recession.How is his misfortune likely to impact Canadian aggregate demand?
A)Positively, because he prefers to make all his purchases in the U.S. from U.S. firms.
B)Negatively, because he prefers to make all his purchases in the U.S. from U.S. firms.
C)Negatively, since he will be in a worse position to purchase Canadian-made goods.
D)Positively, since we are all members of North American free-trade zone.

Question

Quizplus · Accepted Answer

Since Rafael is experiencing the effects of the U.S. recession, he may be in a worse financial position and therefore less likely to spend money on Canadian-made goods, which would decrease Canadian aggregate demand.

Rafael Lives in Miami,Florida,and Like Many Americans He Is Experiencing