If the U.S. dollar appreciates in value relative to foreign currencies, then this will:
A) increase aggregate demand.
B) decrease aggregate demand.
C) cause a movement downward along the aggregate demand curve.
D) cause a movement upward along the aggregate demand curve.

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates, U.S. goods become more expensive for foreign buyers, leading to a decrease in exports. This results in a decrease in aggregate demand.

If the US Dollar Appreciates in Value Relative to Foreign Currencies, Then