Depreciation of the U.S.dollar will shift the AD curve leftward.

Question

Quizplus · Accepted Answer

Depreciation of the U.S. dollar will actually shift the AD (Aggregate Demand) curve rightward. This is because a lower valued dollar will make exports cheaper and therefore more attractive to foreign buyers, increasing exports and subsequently increasing aggregate demand. Additionally, a weaker dollar may also increase demand for domestic goods as they become relatively cheaper than imported goods.