Which of the following statements best describes the relationship between exchange rates and aggregate demand for U.S. output?
A) The exchange rate has no effect on aggregate demand.
B) A high exchange rate for the dollar tends to reduce aggregate demand, and a low rate tends to increase it.
C) A high exchange rate for the dollar tends to increase aggregate demand, and a low rate tends to reduce it.
D) Aggregate demand for U.S. output increases as the exchange rate increases.
Correct Answer:
Verified
Q20: A low exchange rate for the dollar
Q21: A trade deficit allows a country to:
A)consume
Q22: A country can have a trade deficit
Q23: The trade balance is:
A)exports less imports.
B)imports less
Q24: A weaker dollar:
A)raises inflation and contracts the
Q26: A stronger dollar would be a good
Q27: A stronger dollar would be a good
Q28: If a country's trade deficit declines, but
Q29: A weak dollar would pose a potential
Q30: A trade surplus occurs when:
A)imports exceed exports,
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