If the dollar were to depreciate against major foreign currency, the dollar's depreciation should result in:
A)an increase in U.S. exports and an outward shift of the U.S. aggregate demand curve.
B)an increase in U.S. exports and an inward shift of the U.S. aggregate demand curve.
C)a decrease in U.S. exports and an outward shift of the U.S. aggregate demand curve.
D)a decrease in U.S. exports and an inward shift of the U.S. aggregate demand curve.

Question

Quizplus · Accepted Answer

When the dollar depreciates against major foreign currencies, U.S. goods become cheaper for foreign buyers, leading to an increase in U.S. exports. This increase in exports boosts the overall demand for U.S. goods and services, causing an outward shift in the U.S. aggregate demand curve.

If the Dollar Were to Depreciate Against Major Foreign Currency