Assume that the U.S.dollar depreciates against the Japanese yen.What is the impact on aggregate expenditures and income?

Question

Quizplus · Accepted Answer

When the U.S. dollar depreciates against the Japanese yen, U.S. goods become cheaper for Japanese consumers and Japanese goods become more expensive for U.S. consumers. This typically leads to an increase in exports from the U.S. to Japan and a decrease in imports from Japan to the U.S., boosting aggregate expenditures and income in the U.S. economy.

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