If foreign real national income rises,the U.S.____________ curve shifts _____________.When labor productivity increases the _____________ curve shifts _______________.If both of these situations occur simultaneously,the combined result would be a(n)______________ the price level and a(n)__________________ Real GDP in the United States.
A) AD; leftward; SRAS; rightward; decrease in; indeterminant impact on
B) AD; rightward; SRAS; leftward; increase in; indeterminant impact on
C) SRAS; leftward; SRAS rightward; indeterminant impact on; indeterminat impact on
D) AD; rightward; SRAS; rightward; indeterminant impact on; increase in

Question

Quizplus · Accepted Answer

When foreign real national income rises, U.S. exports are likely to increase, shifting the Aggregate Demand (AD) curve rightward. An increase in labor productivity shifts the Short-Run Aggregate Supply (SRAS) curve rightward, indicating more output can be produced at every price level. When both curves shift rightward, the result is an indeterminate impact on the price level due to opposing forces on prices, but a definite increase in Real GDP due to higher demand and supply.

If Foreign Real National Income Rises,the U