Since the outbreak of Covid-19 virus in the US in March 2020 and continuous fall in crude oil price to its 1973 level, the stock markets in the Wall Street has shown an record level rise of prices (with a low levels of ups and downs after in recent moths. In the process, the value of the $ has also shown a continuous decline since Fall 2020 against the Yuan (Renminbi), euro, yen and many other major currencies. However, in the first quarter of 2021, the economy has rebounded, along with the stock market prices breaking the records almost every week since middle of March at a high rate of growth

6A. Given the strong sign of rebound of the US economy, do you think US policy makers would prefer to see the $ rise in value, decline in value or stay at its current value? Discuss the advantages and disadvantages to the US economy at that time of a stronger vs. a weaker $. Frame your answer in terms of the current Aggregate Demand and Aggregate Supply situation of the US economy.

6B. Draw an AS/AD diagram to illustrate your answers for Question A) above. Clearly label axes and the current position of AS & AD relative to full employment RGDP....also indicate any shifts that would occur if the exchange rate of the $ rose sharply against other major currencies