Answer to Question #253475 in Financial Math for Millicent

Question

If foreign income decreases and the domestic economy is at potential output, then domestic aggregate demand will __________ in the short run and domestic aggregate supply will __________ in the long run.

Select one:

a. Decrease not change

b. Increase, not change

c. Increase, increase

d. Decrease, decrease

Answer 1

Correct answer is d.Decrease, decrease