Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
When people in Country A earn more money, they tend to buy more goods and services, including those from Country B. This increase in demand from Country A causes the aggregate demand curve for Country B's products to shift to the right. As a result, businesses in Country B will need to produce more to meet this higher demand, which can lead to an increase in overall economic output. For example, if Country A starts buying more cars from Country B because people have more income, Country B's car manufacturers will produce more cars, hire more workers, and boost their economy. Therefore, the increased income in Country A positively affects the economy of Country B through higher demand for its goods.
Detailed Explanation
When people in Country A earn more money, they buy more goods from Country B. Other options are incorrect because Some might think that Country B's economy won't change.
Key Concepts
Aggregate Demand and Supply
Economic Interdependence
Shifts in Economic Curves
Topic
Graphing Economic Impacts
Difficulty
medium level question
Cognitive Level
understand
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