Last week,six Swedish kronor could purchase one U.S.dollar.This week,it takes eight Swedish kronor to purchase one U.S.dollar.This change in the value of the dollar will ________ exports from the United States to Sweden and ________ U.S.aggregate demand.
A)increase; increase
B)decrease; decrease
C)increase; decrease
D)decrease; increase

Question

Quizplus · Accepted Answer

The correct answer is B. When the value of the dollar increases, it becomes more expensive for other countries to buy U.S. goods, which decreases exports from the United States. Additionally, when the value of the dollar increases, it becomes cheaper for U.S. consumers to buy foreign goods, which decreases U.S. aggregate demand.

Last Week,six Swedish Kronor Could Purchase One U