If the national incomes of foreign countries fall at the same time the dollar appreciates, then in the United States, the aggregate demand curve:
A) shifts to the right.
B) shifts to the left.
C) remains unchanged.
D) does not shift, but there is movement up along it.

Question

Quizplus · Accepted Answer

A fall in foreign national incomes reduces their demand for U.S. exports, and an appreciation of the dollar makes U.S. goods more expensive abroad, both leading to a decrease in U.S. aggregate demand, shifting the curve to the left.

If the National Incomes of Foreign Countries Fall at the Same