In a two-country world (consisting of country X and country Y),an increase in Real GDP in country X will shift country Y's AD curve leftward.

Question

Quizplus · Accepted Answer

The increase in Real GDP in country X may have various effects on country Y's AD curve, such as increasing exports from country Y to country X, leading to a rightward shift in country Y's AD curve. It is not necessarily true that it will always shift leftward.

In a Two-Country World (Consisting of Country X and Country