Consider the Net Export Function and the AE Curve in a Simple

question 109

Multiple Choice

Consider the net export function and the AE curve in a simple macro model with demand-determined output.What is the effect of an exogenous increase in the domestic price level?

• A)The net export function and the AE curve both shift upward.
• B)The net export function shifts upward and the AE curve shifts downward.
• C)The net export function and the AE curve both shift downward.
• D)The net export function shifts downward and the AE curve shifts upward.
• E)The net export function rotates upward and the AE curve shifts upward.

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