When the U.S. dollar appreciates,
A) U.S. exports rise.
B) U.S. imports decline.
C) aggregate demand shifts leftward.
D) aggregate demand shifts rightward.

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates, foreign goods become cheaper for U.S. consumers, leading to an increase in imports and a decrease in exports. This results in a decrease in net exports, causing aggregate demand to shift leftward.

When the U.S. Dollar Appreciates