1. Exchange rates and aggregate supply and demand The following graph illustrates the aggregate demand and aggregate supply curves for the U.S. economy. Suppose that the U.S. dollar has recently appreciated relative to other foreign currencies. Shift the appropriate curve or curves on the graph to illustrate how the appreciation in the U.S. dollar affects the U.S. economy. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE LEVEL REAL GDP Aggregate Supply Aggregate Demand Aggregate Demand Aggregate Supply According to your answer to the graph question, the appreciation of the U.S. dollar leads to (?) in the aggregate price level and
1. Exchange rates and aggregate supply and demand The following graph illustrates the aggregate demand and aggregate supply curves for the U.S. economy. Suppose that the U.S. dollar has recently appreciated relative to other foreign currencies. Shift the appropriate curve or curves on the graph to illustrate how the appreciation in the U.S. dollar affects the U.S. economy. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. PRICE LEVEL REAL GDP Aggregate Supply Aggregate Demand Aggregate Demand Aggregate Supply According to your answer to the graph question, the appreciation of the U.S. dollar leads to (?) in the aggregate price level and
Chapter22: Aggregate Demand And Aggregate Supply
Section: Chapter Questions
Problem 10P
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