Changes in Net Exports Caused by Changes in the Domestic

question 115

Multiple Choice

Changes in net exports caused by changes in the domestic price level

• A) shift the aggregate demand curve in the same direction as the price change.
• B) shift the aggregate demand curve in the opposite direction of the price change.
• C) do not shift the aggregate demand curve.
• D) will not affect aggregate demand.

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Definitions:

Domestic Price

The price of goods or services within a country's borders.

Oil Barrels

A standard unit of measure for crude oil and other petroleum products, equivalent to 42 U.S. gallons.

Foreign Competition

The presence and influence of international companies in a domestic market, which can affect local businesses.

Foreign Wages

This refers to the rates of pay for workers in countries other than the home country, significant in discussions of outsourcing, labor markets, and international competitiveness.