Question 9(1 point)

Which of the following statements is true?

a

As thenational incomes oftrading partners

of the U.S. increase,theyare able to buy more U.S. goods and services, which increases AD. And if the foreign nations' incomes decline, the opposite occurs.

b

If the dollar appreciates relative to another country's currency, AD increases.

c

Depreciation of the dollar promotes U.S. exports since U.S. good become less expensive toforeigners, astheycan get more dollars for each unit of their currency. As US exports increase, AD increases.

d

All of the above.

e

Only a) and c)

Question 10(1 point)

Which of the following statements is true?

a

A dollar depreciation discourages the purchase of imports in the U.S. because now one dollar can only be exchanged for less units of foreign currency, which makes our imported goods more expensive. As US imports decrease, AD increases.

b

If the dollar appreciates relative to another country's currency, AD increases.

c

A dollar appreciation discourages U.S. exports because now U.S. goods are relatively more expensive than before, since it takes more units of foreign currency to buy a dollar. As US exports fall, AD declines. The dollar appreciation also encourages more purchases of imports since one dollar can buy now more units of the foreign currency than before. As imports increase, AD declines.

d

All of the above.

e

Only a) and c)