Suppose Net Exports Decreases by $100 Million Due to a Slump

question 156

Multiple Choice

Suppose net exports decreases by $100 million due to a slump in foreign economies. If the the value of the multiplier is 2, what happens to the domestic aggregate demand curve?

• A) Since less will be produced, the aggregate demand does not shift. The aggregate supply curve shifts to the left by $100 million at each price level.
• B) It shifts to the left by $50 million at each price level.
• C) It shifts to the left by $100 million at each price level.
• D) It shifts to the left by $200 million at each price level.

---

Definitions:

Life Estate

A property interest that lasts for the life of the holder, after which the property reverts to the grantor or a specified remainderman.

Legal Recourse

Legal recourse refers to the right of an individual or entity to seek legal remedy or compensation through the judicial system in response to a wrongdoing or dispute.

Future Owner

An individual or entity that is designated or expected to become the owner of an asset or property at a future date.

Repairs

The process of fixing or restoring something that is broken, damaged, or malfunctioning to a good condition.