If the dollar appreciates, _____ will _____, causing aggregate demand to _____, the aggregate price level to _____, and output to _____ in the short run.
A) exports; increase; rise; rise; rise
B) exports; decrease; fall; fall; rise.
C) imports; decrease; rise; rise; rise
D) exports; decrease; fall; fall; fall

Question

Quizplus · Accepted Answer

When the dollar appreciates, exports become more expensive for foreign buyers, leading to a decrease in exports. This decrease in exports causes aggregate demand to fall, which in turn causes the aggregate price level to fall and output to decrease in the short run.

If the Dollar Appreciates, _____ Will _____, Causing Aggregate Demand

If the Dollar Appreciates, _ Will _, Causing Aggregate Demand