What Are the Economic Effects of a Currency Appreciation

question 133

Multiple Choice

What are the economic effects of a currency appreciation?

• A)It will decrease aggregate demand and aggregate supply, so that output will certainly fall, and prices may fall as well.
• B)It will increase aggregate demand and aggregate supply, so that output will certainly rise, and prices may rise as well.
• C)It will increase aggregate demand and decrease aggregate supply, so that prices will certainly rise, and output may rise as well.
• D)It will decrease aggregate demand and increase aggregate supply, so that prices will certainly fall, and output may fall as well.

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Definitions:

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