Final answer:
A decrease in imports and an increase in exports typically cause an increase in net exports, shifting the country's aggregate demand curve to the right and positively affecting GDP and price level.
Step-by-step explanation:
When a country's imports decrease and exports increase, this usually leads to a rise in net exports. An increase in net exports contributes positively to a country's aggregate demand, because net exports are a component of aggregate demand (alongside consumption, investment, and government spending).
Therefore, an increase in net exports caused by decreasing imports and increasing exports typically results in a shift to the right of the aggregate demand curve.
Analogously, if a country's exports fall, this would cause the aggregate demand curve to shift to the left. The multiplier effect amplifies the change: an initial increase in net exports leads to a larger aggregate demand shift due to the multiplier.
Relative prices also play a crucial role; more competitive prices can lead to increased exports, while relatively higher prices can harm export levels and shift the aggregate demand curve accordingly.