If the Dollar Depreciates in Value Relative to Foreign Currencies

question 32

Multiple Choice

If the dollar depreciates in value relative to foreign currencies, then aggregate

• A) demand decreases.
• B) demand increases.
• C) supply and aggregate demand increase.
• D) supply and aggregate demand decrease.

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Definitions:

Primacy Effect

The tendency to remember and give greater importance to information that is encountered first in a sequence.

Self-Serving Bias

A common cognitive bias where individuals attribute positive events to their own character but attribute negative events to external factors.

Actor-Observer Effect

A cognitive bias in which people tend to attribute their own actions to external circumstances but attribute others' actions to their personalities or character.

Primacy Effect

The tendency to remember the first pieces of information in a series better than the information in the middle.