Japanese electronics exports were hurt in 2008 as a result of the recession.How would this decrease in exports have affected Japan's aggregate demand curve?
A)The aggregate demand curve would have shifted to the right.
B)The aggregate demand curve would not have shifted,but there would have been a movement up the aggregate demand curve.
C)The aggregate demand curve would not have shifted,but there would have been a movement down the aggregate demand curve.
D)The aggregate demand curve would have shifted to the left.

Question

Quizplus · Accepted Answer

A decrease in exports would shift the net exports component of the aggregate demand curve to the left, resulting in a leftward shift of the overall aggregate demand curve. This is because a decrease in exports means less income and spending within Japan's economy, leading to a decrease in overall demand for goods and services.

Japanese Electronics Exports Were Hurt in 2008 as a Result