contestada

If the dollar appreciates in value relative to foreign currencies, aggregate demand decreases because: ___________

a. consumption decreases.
b. increases because consumption increases.
c. decreases because net exports decrease.
d. increases because net exports increase.

Respuesta :

When dollar appreciates in value relative to foreign currencies aggregate demand decreases because net exports decrease.

What is aggregate demand?

It is the total demand for goods and services produced domestically, this includes goods consumed and services rendered.

If dollar appreciates it will lead to an increase in the cost of goods and services for the foreign country thereby decreasing the net export.

Therefore, If the dollar appreciates in value relative to foreign currencies, aggregate demand decreases because net exports decrease.

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