contestada

If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports:
a. increase which shifts aggregate demand left.
b. decrease which shifts aggregate demand right.
c. decrease which shifts aggregate demand left.
d. increase which shifts aggregate demand right.

Respuesta :

Answer:

The correct answer is option c.

Explanation:

If there is an appreciation in the value of the dollar, it implies that the value of the dollar has increased in comparison to foreign currency. This means that foreign consumers will need to pay more for US goods. This will cause a decline in export demand.  

Because of the decline in exports, the net exports will fall. This decrease in the net exports will cause the aggregate demand to fall. As a result, the aggregate demand curve will shift to the left.