Other Things Equal, Appreciation of the Dollar

question 252

Multiple Choice

Other things equal, appreciation of the dollar

• A) increases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources.
• B) increases aggregate demand in the United States and may decrease aggregate supply by reducing the prices of imported resources.
• C) decreases aggregate demand in the United States and may increase aggregate supply by reducing the prices of imported resources.
• D) decreases aggregate demand in the United States and may reduce aggregate supply by increasing the prices of imported resources.

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Definitions:

Net Income

The amount a company earns after deducting every cost, expense, and tax from its total income.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

Market Price

The present rate at which a service or asset is being traded.

Net Income

The final amount of money a company makes after removing all operational costs, taxes, and additional expenses from the overall income.