When We Relax the Assumption That Net Exports Do Not

question 12

Multiple Choice

When we relax the assumption that net exports do not change with income, the aggregate expenditure function

• A)becomes steeper because net exports decrease as real domestic income increases
• B)becomes steeper because net exports increase as real domestic income increases
• C)becomes flatter because net exports decrease as real domestic income increases
• D)becomes flatter because net exports increase as real domestic income increases
• E)remains unchanged because it is not affected by changes in net exports