Everything else remaining the same, an increase in foreign income
A)creates a movement downward along Canada's aggregate demand curve.
B)decreases Canada's aggregate demand.
C)increases Canada's aggregate demand.
D)decreases Canada's aggregate supply.
E)increases Canada's aggregate supply.

Question

Quizplus · Accepted Answer

An increase in foreign income means that there is an increase in Canada's exports, which creates an increase in demand for Canadian goods and services. This increase in demand shifts Canada's aggregate demand curve to the right, resulting in an increase in Canada's aggregate demand.

Everything Else Remaining the Same, an Increase in Foreign Income