If income falls abroad and consequently net exports fall,the aggregate demand curve will shift to the right.

Question

Quizplus · Accepted Answer

If income falls abroad and net exports fall, this would result in a decrease in the foreign sector's demand for goods and services from the domestic economy. This would shift the aggregate demand curve to the left, as there would be reduced demand for goods and services domestically as well. Therefore, the statement is false.

If Income Falls Abroad and Consequently Net Exports Fall,the Aggregate