If the international value of the dollar rises, the
A)aggregate demand curve will shift inward.
B)aggregate supply curve will shift outward.
C)U.S.price level will fall.
D)All of these responses are correct.

Question

Quizplus · Accepted Answer

When the international value of the dollar rises, it means that the dollar is stronger compared to other currencies. This leads to cheaper imports, reducing the domestic price level (C), which can decrease domestic demand for domestically produced goods, shifting the aggregate demand curve inward (A). Additionally, cheaper imports can reduce costs for businesses that rely on imported goods or materials, potentially shifting the aggregate supply curve outward (B) due to lower production costs. Therefore, all of these responses are correct.

If the International Value of the Dollar Rises, the