If the Dollar Appreciates While Foreign Income Rises

question 189

Multiple Choice

If the dollar appreciates while foreign income rises:

• A)the U.S. AD curve would likely shift to the left.
• B)the U.S. AD curve would likely shift to the right.
• C)the U.S. AD curve would likely remain unchanged.
• D)what happens to the U.S. AD curve is unclear.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them proportionate ownership depending on the amount of stock held.

Utility Function

A mathematical representation that ranks consumer preferences or satisfaction levels from consuming various goods or services.

Wealth

The total value of all financial and non-financial assets owned by an individual or entity, minus any debts owed.

Diminishing Marginal Utility

A principle stating that as a person increases consumption of a product, there is a decline in the added satisfaction that comes from consuming one additional unit.