Assume there is a reduction in U.S.output.Then under MAER there will be an:
A) Increase in domestic money supply
B) Decrease in domestic money supply
C) Increase in the exchange rate dollar/foreign currency
D) Decrease in the exchange rate dollar/foreign currency

Question

Quizplus · Accepted Answer

Under MAER, a reduction in U.S. output will lead to a decrease in the demand for U.S. goods and services, which will in turn lead to a decrease in the demand for U.S. dollars. This will cause the exchange rate dollar/foreign currency to decrease.

Assume There Is a Reduction in U