If British incomes rose, this would be reflected in the short-run model as a shift in the U.S. AS to the right.

Question

Quizplus · Accepted Answer

The statement is incorrect. An increase in British incomes would not lead to a shift in the U.S. AS curve, which represents the total supply of goods and services available in the U.S. market. Rather, it might affect the U.S. aggregate demand (AD) curve, which represents the total demand for goods and services in the U.S. economy.

If British Incomes Rose, This Would Be Reflected in the Short-Run