Multiple Choice
Which of the following statements best describes the relationship between exchange rates and aggregate demand for U.S. output?
A) The exchange rate has no effect on aggregate demand.
B) A high exchange rate for the dollar tends to reduce aggregate demand, and a low rate tends to increase it.
C) A high exchange rate for the dollar tends to increase aggregate demand, and a low rate tends to reduce it.
D) Aggregate demand for U.S. output increases as the exchange rate increases.
Correct Answer:
Verified
Correct Answer:
Verified
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