If the U.S.dollar decreases in value relative to other currencies,how does this affect the aggregate demand curve?
A)This will move the economy up along a stationary aggregate demand curve.
B)This will move the economy down along a stationary aggregate demand curve.
C)This will shift the aggregate demand curve to the left.
D)This will shift the aggregate demand curve to the right.

Question

Quizplus · Accepted Answer

When the U.S. dollar decreases in value relative to other currencies, U.S. goods and services become cheaper for foreign buyers, increasing exports. Simultaneously, foreign goods and services become more expensive for U.S. consumers, reducing imports. This increase in net exports raises the aggregate demand, shifting the aggregate demand curve to the right.

If the USDollar Decreases in Value Relative to Other Currencies,how Does This