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 = X - mY where 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 (X ), increasing NX at every Y: NX' = (X + X) - mY The NX curve shifts right. Step 6: Option D -- An increase in imports: Autonomous imports rise or m , decreasing NX at every Y. The NX curve shifts left. The answer is C. C