From 1975 to 1995, the value of the dollar in terms of yen fell from over 300 yen per dollar to about 100 yen per dollar. Considering the impact of this alone, this would likely:
A)shift the U.S. AD curve to the left.
B)shift the U.S. AD curve to the right.
C)make the U.S. AD curve flatter.
D)make the U.S. AD curve steeper.

Question

Quizplus · Accepted Answer

When the value of the dollar falls in terms of yen, U.S. goods become cheaper for Japanese consumers, leading to an increase in exports from the U.S. to Japan. This increase in exports would likely increase aggregate demand in the U.S. economy, shifting the U.S. AD curve to the right.

From 1975 to 1995, the Value of the Dollar in Terms