If the U.S.dollar increases in value relative to other currencies,how does this affect the aggregate demand curve?
A)This will move the economy up along a stationary aggregate demand curve.
B)This will move the economy down along a stationary aggregate demand curve.
C)This will shift the aggregate demand curve to the left.
D)This will shift the aggregate demand curve to the right.

Question

Quizplus · Accepted Answer

When the U.S. dollar increases in value relative to other currencies, it makes U.S. exports more expensive and imports cheaper, which leads to a decrease in net exports. As a result, the AD curve shifts to the left, indicating a decrease in aggregate demand.

If the USDollar Increases in Value Relative to Other Currencies,how Does This