What is the domestic effect of an increase in the incomes of a country's major international trading partners?
A)The aggregate demand curve will shift to the right.
B)The aggregate demand curve will shift to the left.
C)The aggregate supply curve will shift to the right.
D)The aggregate supply curve will shift to the left.

Question

Quizplus · Accepted Answer

An increase in the incomes of a country's major international trading partners means that those countries will have more purchasing power and will therefore demand more goods and services from the domestic country. This will lead to an increase in exports and a shift of the aggregate demand curve to the right.

What Is the Domestic Effect of an Increase in the Incomes