A currency appreciation reduces aggregate demand and increases aggregate supply.

Name: A currency appreciation reduces aggregate demand and increases aggregate supply.
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A currency appreciation makes exports more expensive and imports cheaper, reducing the demand for domestic goods and services, and increasing imports. This leads to a decrease in aggregate demand. On the other hand, the cost of production for domestic producers decreases, making exports more competitive, and increasing aggregate supply.

A Currency Appreciation Reduces Aggregate Demand and Increases Aggregate Supply