Figure 20-7

-In Figure 20-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from A to B?
A)a European economic expansion
B)a decrease in the money supply
C)an increase in the interest rate
D)an increase in the U.S.price level

Question

Figure 20-7
 
-In Figure 20-7, there are three aggregate expenditure functions (C + I + G + X − IM) for an open economy.Which of the following would cause a movement from A to B?
A)a European economic expansion 
B)a decrease in the money supply 
C)an increase in the interest rate 
D)an increase in the U.S.price level

Quizplus · Accepted Answer

A European economic expansion would increase demand for U.S. exports, shifting the aggregate expenditure function upward, causing a movement from A to B.

Figure 20-7 -In Figure 20-7, There Are Three Aggregate Expenditure Functions (C