An autonomous increase in net exports for any given inflation rate ________.
A) would add directly to planned expenditures
B) would raise the equilibrium level of output
C) the aggregate demand curve would shift to the right
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

An autonomous increase in net exports would add directly to planned expenditures, as it would increase aggregate demand. This increase in aggregate demand would raise the equilibrium level of output, as more goods and services would be demanded. This, in turn, would cause the aggregate demand curve to shift to the right. Therefore, all of the above choices are correct.

An Autonomous Increase in Net Exports for Any Given Inflation