If speculators gained greater confidence in foreign economies so that they wanted to buy more assets of foreign countries and fewer U.S.bonds,
A)the dollar would appreciate which would cause aggregate demand to shift right.
B)the dollar would appreciate which would cause aggregate demand to shift left.
C)the dollar would depreciate which would cause aggregate demand to shift right.
D)the dollar would depreciate which would cause aggregate demand to shift left.

Question

Quizplus · Accepted Answer

If speculators buy more foreign assets and fewer U.S. bonds, demand for foreign currency increases and demand for the dollar decreases, causing the dollar to depreciate. A weaker dollar makes U.S. goods cheaper for foreigners, increasing exports and shifting aggregate demand to the right.

If Speculators Gained Greater Confidence in Foreign Economies So That