The relationship between net exports and GDP makes the slope of the aggregate expenditure curve
A) flatter than it would be otherwise.
B) steeper than it would be otherwise.
C) neither flatter nor steeper than it would be otherwise.
D) steeper at low levels of GDP and flatter at high levels of GDP.

Question

Quizplus · Accepted Answer

Net exports are a component of aggregate expenditure, and when they decrease as GDP increases, they cause the aggregate expenditure curve to be flatter than it would be otherwise.

The Relationship Between Net Exports and GDP Makes the Slope