If the Dollar Price of Foreign Currencies Falls (That Is

question 227

Multiple Choice

If the dollar price of foreign currencies falls (that is, the dollar appreciates) , we would expect

• A) aggregate demand to decrease and aggregate supply to increase.
• B) both aggregate demand and aggregate supply to decrease.
• C) both aggregate demand and aggregate supply to increase.
• D) aggregate demand to increase and aggregate supply to decrease.

---

Definitions:

Federal Budget Deficit

The financial situation where the federal government's expenditures exceed its revenues in a given fiscal year.

National Debt

The total amount of money that a country's government has borrowed by various means.

Fiscal Policy

Government policies concerning taxation and spending that are aimed at influencing economic conditions, including promoting economic growth, controlling inflation, and reducing unemployment.

Government Deficit

Occurs when a government's expenditures exceed its revenues during a specific period, leading to borrowing or drawing from reserves.