Final answer:
An increase in net exports leads to an upward shift in the aggregate expenditures curve and a rightward shift in the aggregate demand curve due to the international trade effect and multiplier.
Step-by-step explanation:
An increase in net exports will shift the aggregate expenditures curve upward and the aggregate demand curve rightward. This is because net exports are a component of aggregate demand, and when they increase, they contribute to higher total spending in the economy. Consequently, the aggregate demand curve shifts to the right, illustrating an increase in the total quantity of goods and services demanded at every price level. This is the international trade effect, where a change in net exports due to factors like incomes in other nations, the exchange rate, and trade policies, can lead to a significant shift in aggregate demand, which is amplified by the multiplier. Conversely, a decrease in net exports would lead to a downward shift in the aggregate expenditures curve and a leftward shift of the aggregate demand curve, reducing the equilibrium quantity of output and the price level.