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

Question

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

Quizplus · Accepted Answer

When the dollar rises in value, imports become cheaper, which can lead to an increase in aggregate supply as production costs decrease due to cheaper imported inputs.

If the Dollar Rises in Value Compared to Other Currencies