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How Does a Rise in the Foreign Exchange Rate Affect

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How does a rise in the foreign exchange rate affect aggregate demand in the United States? Explain your answer.


Definitions:

U.S. Government

The federal government of the United States, a constitutional republic comprising the Executive, Legislative, and Judicial branches.

Market-Value Weighted

An indexing method where the weight of each constituent security in an index or portfolio is based on its total market capitalization, favoring larger companies.

Dow Jones Industrial Average

A stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

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