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

Question

Quizplus · Accepted Answer

An increase in foreign income would likely lead to an increase in demand for Canadian exports, which would increase Canada's aggregate demand. This is because foreign income is one factor that can influence the demand for Canadian exports, which are a component of Canada's GDP. Therefore, all else being equal, an increase in foreign income would lead to an increase in Canada's aggregate demand.

Everything Else Remaining the Same, an Increase in Foreign Income