Question 35 1 point RGDP in Sugarplum Valley is rising Sugar

Question 35 (1 point) RGDP in Sugarplum Valley is rising. Sugarplum Valley is the Turkeyville\'s leading trade partner. Which attached graph of Turkeyville depicts what will happen in the Turkeyville\'s economy because of the change in Sugarplum Valley? Turkeyville 1) graph a 2) graph b 3) graph c 4) graph d

Solution

Ans: The graph must be the \'a\'.

Due to the rise in the real GDP there should be more import from the Turkeyville so the there is an increased demand for the products of Turkeyville and this raises the aggreate demand in the economy. The aggregate demand curve will shift to the right. This is shown in panel \'A\'.