When the dollar appreciates,U.S.
A)net exports rise,which increases the aggregate quantity of goods and services demanded.
B)net exports rise,which decreases the aggregate quantity of goods and services demanded.
C)net exports fall,which increases the aggregate quantity of goods and services demanded.
D)net exports fall,which decreases the aggregate quantity of goods and services demanded.

Question

Quizplus · Accepted Answer

When the dollar appreciates, it means that the value of the dollar increases relative to other currencies. This makes U.S. goods and services more expensive for people in other countries, leading to a decrease in demand for U.S. exports, thus decreasing net exports. A decrease in net exports leads to a decrease in the aggregate quantity of goods and services demanded.

When the Dollar Appreciates,U.S