If the dollar falls in value compared to other currencies, what will happen in the United States?
A)A decrease in aggregate demand
B)An increase in aggregate supply
C)A decrease in aggregate supply
D)A decrease in the U.S.price level

Question

Quizplus · Accepted Answer

If the dollar falls in value compared to other currencies, it becomes more expensive to import goods into the United States, which leads to a decrease in aggregate supply. This is because the cost of goods increases, and producers may not be able to produce as much due to increased input costs. As a result, the United States would experience a decrease in aggregate supply.

If the Dollar Falls in Value Compared to Other Currencies