How Does Canadian Aggregate Demand Change If the Dollar Appreciates

question 3

Multiple Choice

How does Canadian aggregate demand change if the dollar appreciates or other countries experience recessions?

• A) Aggregate demand shifts right.
• B) Aggregate demand shifts left.
• C) If the dollar appreciates, aggregate demand shifts right; if other countries experience recessions, aggregate demand shifts left.
• D) If the dollar appreciates, aggregate demand shifts left; if other countries experience recessions, aggregate demand shifts right.

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Definitions:

Trade Balance

The difference in value between a country's imports and its exports; a surplus indicates more exports than imports, and a deficit the opposite.

Currency

The paper bills and coins in the hands of the public.

Open-Economy Macroeconomic Model

A framework used in economics to analyze and understand the behaviors and interactions of economies that engage in international trade and finance.

Import Quotas

Limits set by a government on the amount of a specific good that can be imported into the country.