Which one of the following will cause a shift of the NX curve to the right?

Step 1: The NX curve shows net exports (NX = Exports $-$ Imports) as a function of income (Y). It slopes downward because higher Y increases imports, reducing NX:
$NX = \overline{X} - mY$
where $\overline{X}$ is autonomous exports and $m$ is the marginal propensity to import ($m > 0$).

Step 2: A rightward shift of the NX curve means higher NX at every Y level (e.g., due to higher autonomous exports).

Step 3: Option A -- An increase in the level of output and income:
This raises Y, causing a movement along the NX curve to a lower NX (higher imports). No shift.

Step 4: Option B -- An increase in government spending:
This raises Y (via multiplier), causing a movement along the NX curve to lower NX. No shift.

Step 5: Option C -- An increase in foreign demand for domestic goods:
This raises autonomous exports ($\overline{X} \uparrow$), increasing NX at every Y:
$NX' = (\overline{X} + \Delta X) - mY$
The NX curve shifts right.

Step 6: Option D -- An increase in imports:
Autonomous imports rise or $m \uparrow$, decreasing NX at every Y. The NX curve shifts left.

The answer is C.
C