What angle do you look at this question

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Reference no: EM13150634

If Canada is the most important trading partner of the United States, what effect will stagflation in Canada have on aggregate demand in the U.S.?

A) It will increase the aggregate demand in the U.S.

B)The effect will be indeterminate

C)It will increase aggregate demand in the U.S. if the decrease in Canadian output is large enough

D) It will decrease aggregate demand in the U.S.

E) It will increase aggregate demand in the U.S. if the decrease in Canadian unemployment is very large

From what angle do you look at this question? I know that AD = C + I + G + NX. But honestly I have no idea where to go from there.

Reference no: EM13150634

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