Scenario 33-1 Suppose That Political Instability in Other Countries Makes People Fear

question 100

Multiple Choice

Scenario 33-1
Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets.
-Refer to Scenario 33-1. What would the change in the exchange rate make happen to U.S. net exports and U.S. aggregate demand?

• A)Net exports would rise which by itself would increase U.S.aggregate demand.
• B)Net exports would rise which by itself would decrease U.S.aggregate demand.
• C)Net exports would fall which by itself would increase U.S.aggregate demand.
• D)Net exports would fall which by itself would decrease U.S.aggregate demand.

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