Which one of the following statements is INCORRECT?
A. An increase in foreign output (Y*↑) does not shift curve DD because domestic consumption, domestic investment, and domestic government spending are not determined by foreign income and output.
B. The difference between curve ZZ and curve DD equals exports.
C. If there is an increase in foreign demand, it will increase output and income. The NX curve will shift to the right to NX1, and there is an improvement in the trade balance position.
D. At the equilibrium level of output Y1, domestic demand is given by the distance DC; the demand for domestic goods is given by distance DA1; therefore, net exports are given by distance CA1