If a Country's Currency Appreciates, What Impact Will It Have

question 176

Multiple Choice

If a country's currency appreciates, what impact will it have on aggregate demand or aggregate supply?

• A) Aggregate demand will rise because the currency will buy more abroad.
• B) Long-run aggregate supply will rise because investment returns will rise.
• C) Short-run aggregate supply will rise due to lower prices on imported inputs.
• D) Long-run aggregate supply will fall because imports will rise.

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