The Net Effect of a Stronger Dollar on Real GDP

question 22

Multiple Choice

The net effect of a stronger dollar on real GDP is

• A) an increase in real GDP.
• B) a decrease in real GDP.
• C) an increase in the price level.
• D) dependent on whether the increase in aggregate supply is more or less than the decrease in aggregate demand.

---

Definitions:

Long-Term Assets

Assets that a company intends to hold for more than one year, including property, plant, and equipment.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the company's financial condition.

Current Ratio

Current ratio is a financial metric used to evaluate a company's ability to pay off its short-term liabilities with its short-term assets.

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets, calculated as (Current Assets - Inventory) / Current Liabilities.