Figure 13-1 -Refer to Figure 13-1.Ceteris paribus,an increase in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from A)AD₁ to AD₂. B)AD₂ to AD₁. C)point A to point B. D)point B to point A.

Question

Quizplus · Accepted Answer

An increase in the growth rate of domestic GDP relative to the growth rate of foreign GDP would result in an increase in domestic demand for foreign goods and services, which would shift the AD curve to the right. Therefore, the correct answer would be a movement from AD₂ to AD₁.

Figure 13-1 -Refer to Figure 13-1.Ceteris Paribus,an Increase in the Growth Rate