Suppose that the United States, our largest trading partner and the purchaser of a large quantity of our exports, goes into a recession. Using the Aggregate Demand (AD)/Aggregate Supply (AS) model to determine the likely impact on our equilibrium GDP and price level.
Question 2 options:
This would decrease our net exports, shifting AD left and leading to a decrease in GDP and price level.
This would decrease our net exports, shifting AD left and leading to a decrease in price level and increase in GDP.
This would increase our net exports, shifting AD right and leading to a decrease in GDP and increase in price level.
This would decrease our net exports, shifting AD left and leading to an increase in GDP and price level.