If the dollar depreciates because of speculation or government policy,U.S.
A)aggregate demand shifts left.U.S.aggregate demand also shifts left if other countries experience an increase in real GDP.
B)aggregate demand shifts left.U.S.aggregate demand shifts right if other countries experience an increase in real GDP.
C)aggregate demand shifts right.U.S.aggregate demand also shifts right if other countries experience a decrease in real GDP.
D)aggregate demand shifts right.U.S.aggregate demand shifts left if other countries experience a decrease in real GDP.

Question

Quizplus · Accepted Answer

A depreciation of the dollar makes U.S. goods cheaper for foreign buyers, increasing exports and shifting aggregate demand to the right. If other countries experience a decrease in real GDP, their demand for U.S. exports may decrease, shifting U.S. aggregate demand to the left.

If the Dollar Depreciates Because of Speculation or Government Policy,U