Politics

Question

Question 11 (1 point)

Other things being equal, what is the effect of an exogenous rise in the price level in

Canada?

© A) The desired investment function shifts upward.

• B) The aggregate expenditure function shifts upward.

C) The net export function shifts upward.

D) Imports of foreign goods fall.

E) Canadian goods become more expensive relative to foreign goods.

Answer

B) The aggregate expenditure function shifts upward.

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An exogenous rise in the price level in Canada will cause the aggregate expenditure function to shift upward. This is because the higher price level will lead to...