Your Friend States That (I)a Strong Dollar (Appreciation of the Dollar)is

Essay

Your friend states that (i)a strong dollar (appreciation of the dollar)is a sign of a healthy economy and that (ii)a weak dollar (depreciation of the dollar)is a sign of a weak economy. Assuming that other factors that could affect the exchange rate do not change, explain that the opposite is true when the following are considered:
a.the effect of rapidly falling incomes in Australia during a recession
b.the effect of rapidly rising incomes in Australia during an economic expansion
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