A stronger U.S. dollar leads to ________ in SRAS and ________ in AD simultaneously.
A) a leftward shift; a rightward shift
B) a rightward shift; a leftward shift
C) a rightward shift; a rightward shift
D) a leftward shift; a leftward shift

Question

Quizplus · Accepted Answer

A stronger U.S. dollar makes imports cheaper and exports more expensive. This leads to a rightward shift in the Short-Run Aggregate Supply (SRAS) due to lower production costs but a leftward shift in Aggregate Demand (AD) as exports decrease and imports increase, reducing net exports.

A Stronger U