Scenario 1 Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets. 11. Refer to Scenario 1. What would the change in the exchange rate make happen to U.S. net exports and U.S. aggregate demand? a. Net exports would rise which by itself would increase U.S. aggregate demand. b. Net exports would rise which by itself would decrease U.S. aggregate demand. c. Net exports would fall which by itself would increase U.S. aggregate demand. HIGH
Scenario 1 Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets. 11. Refer to Scenario 1. What would the change in the exchange rate make happen to U.S. net exports and U.S. aggregate demand? a. Net exports would rise which by itself would increase U.S. aggregate demand. b. Net exports would rise which by itself would decrease U.S. aggregate demand. c. Net exports would fall which by itself would increase U.S. aggregate demand. HIGH
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: A Macroeconomic Theory Of The Open Economy
Section: Chapter Questions
Problem 9PA
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Transcribed Image Text:Scenario 1
Suppose that political instability in other countries makes people fear for the value of their assets in these countries so
that they desire to purchase more U.S assets.
11. Refer to Scenario 1. What would the change in the exchange rate make happen to U.S. net exports and U.S.
aggregate demand?
a. Net exports would rise which by itself would increase U.S. aggregate demand.
b. Net exports would rise which by itself would decrease U.S. aggregate demand.
c. Net exports would fall which by itself would increase U.S. aggregate demand.
d. Net exports would fall which by itself would decrease U.S. aggregate demand.
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