How Would Aggregate Demand Change If Foreign Incomes Increase and the Exchange

question 27

Multiple Choice

How would aggregate demand change if foreign incomes increase and the exchange rate value of the dollar increases?

• A) Neither change would affect aggregate demand.
• B) The increase in income would decrease aggregate demand; the increase in the exchange rate would increase aggregate demand.
• C) The increase in income would increase aggregate demand; the increase in the exchange rate would decrease aggregate demand.
• D) Both changes would decrease aggregate demand.

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