Using symbols and explaining their meaning, distinguish between: (1) the domesticdemand for goods; and (2) the demand for domestic goods for an open economy.

b.Explain why the demand for domestic goods curve (ZZ) has a different slope than the domestic demand for goods curve (DD).

b.Using fully labeled ZZ/Y and NX/Y figures, illustrate graphically and EXPLAININTUITIVELY (i.e., by economic relationships) what effect, if any, an increase in taxes has on output, exports, imports, and net exports.