Mexico trades with the United States. Explain the effect of each of the following events on the quantity of real GDP demanded and aggregate demand in Mexico. When the U.S. economy goes into a recession, . A. Mexico's imports from the United States decrease and Mexico's aggregate demand increases B. Mexico's price level falls and quantity of real GDP demanded decreases, but Mexico's aggregate demand is unchanged C. Mexico's price level falls and quantity of real GDP demanded increases, but Mexico's aggregate demand is unchanged D. Mexico's exports to the United States decrease, Mexico's aggregate demand decreases, and Mexico's AD curve shifts leftward When Mexico decreases the quantity of money, Mexico's aggregate demand . A. is unchanged, but the quantity of real GDP demanded increases and there is a movement down along the AD curve B. decreases and its AD curve shifts leftward C. increases and its AD curve shifts rightward D. is unchanged, but the quantity of real GDP demanded decreases and there is a movement up along the AD curve When the price level in Mexico falls, ___. A. Mexico's aggregate demand decreases B. Mexico's aggregate demand increases C. the quantity of real GDP demanded in Mexico decreases D. the quantity of real GDP demanded in Mexico increases

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TomShelby TomShelby · Answer 1 · 2019-12-26T18:33:10+01:00

Answer:

When the U.S. economy goes into a recession,

D. Mexico's exports to the United States decrease, Mexico's aggregate demand decreases, and Mexico's AD curve shifts leftward

When Mexico decreases the quantity of money, Mexico's aggregate demand

B. decreases and its AD curve shifts leftward

When the price level in Mexico falls,

D. the quantity of real GDP demanded in Mexico increases

Explanation:

Reasoning:

If US goes into a recession their GDP decreases thus, the quantity they import from mexico also decreases.

This makes the AD curve in Mexico to decrease as well as exports are a variable in the AD curve

If money supply decreases the AD demand which can also be determinate as money supply times velocity will decrease

If price level decrease the real GDP demanded in mexico increases as it is cheaper for US to import thus export in mexico increases.