What would happen to Canadian net exports and aggregate demand if countries that imported from Canada went into recession?
A) Net exports would rise, and aggregate demand would shift right.
B) Net exports would rise, and aggregate demand would shift left.
C) Net exports would fall, and aggregate demand would shift right.
D) Net exports would fall, and aggregate demand would shift left.

Question

Quizplus · Accepted Answer

If countries that import from Canada entered a recession, their demand for Canadian goods and services would decrease, causing Canadian net exports to fall. Since net exports are a component of aggregate demand, a decrease in net exports would cause aggregate demand to shift left.

What Would Happen to Canadian Net Exports and Aggregate Demand