Other things being equal, the effect of a downward shift of the economy's net export schedule on equilibrium GDP will be similar to a(n)
A)rightward shift in the investment-demand schedule.
B)downward shift in the consumption schedule.
C)upward shift in the consumption schedule.
D)upward shift in the investment schedule.

Question

Quizplus · Accepted Answer

A downward shift in the net export schedule reduces aggregate demand, similar to a downward shift in the consumption schedule, which also decreases aggregate demand and thus equilibrium GDP.

Other Things Being Equal, the Effect of a Downward Shift