Which set of events would most likely increase aggregate demand?
A) An increase in incomes in foreign nations and a depreciation of the dollar.
B) An increase in incomes in foreign nations and an appreciation of the dollar.
C) A decrease in incomes in foreign nations and an appreciation of the dollar.
D) A decrease in incomes in foreign nations and a depreciation of the dollar.

Question

Quizplus · Accepted Answer

An increase in incomes in foreign nations would likely lead to higher demand for exports, and a depreciation of the dollar makes exports cheaper and more attractive to foreign buyers, both of which would increase aggregate demand.

Which Set of Events Would Most Likely Increase Aggregate Demand