If the dollar appreciates because of speculation or government policy U.S.
A)aggregate demand shifts left. U.S. aggregate demand also shifts left if other countries experience recessions.
B)aggregate demand shifts left. U.S. aggregate demand shifts right if other countries experience recessions.
C)aggregate demand shifts right. U.S. aggregate demand also shifts right if other countries experience recessions.
D)aggregate demand shifts right. U.S. aggregate demand shifts left if other countries experience recessions.

Question

Quizplus · Accepted Answer

When the dollar appreciates, it becomes more expensive for other countries to buy U.S. exports, causing a decrease in net exports. This decrease in net exports leads to a decrease in aggregate demand, shifting it leftward. Additionally, if other countries experience recessions, they may reduce their imports from the U.S., further decreasing net exports and aggregate demand.

If the Dollar Appreciates Because of Speculation or Government Policy