Everything else held constant, a shift in tastes in Canada toward Mexican goods will ________ net exports in Canada and cause the quantity of aggregate output demanded to ________ in Mexico.
A) decrease; rise
B) decrease; fall
C) increase; rise
D) increase; fall

Question

Quizplus · Accepted Answer

A shift in tastes in Canada toward Mexican goods will decrease net exports in Canada because Canadians will be importing more from Mexico. Consequently, the quantity of aggregate output demanded in Mexico will rise due to increased demand for Mexican goods.

Everything Else Held Constant, a Shift in Tastes in Canada