Question: Shift up the ZZ (through the increase in export), but no change in DD. NX curve shifts up as a result. (a) If initially

Shift up the ZZ (through the increase in export), but no change in DD. NX curve shifts up as a result. (a) If initially at trade balance, an increase in foreign demand will increase Y and lead to trade surplus. (b) AX>O Output, Y AX>O. Output, Y Domestic demand for goods Demand for domestic goods NX' NX 16

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