Question

As a result of an increase in the value of the dollar in relation to other currencies, American producers now pay less in dollar terms for foreign steel, a major commodity used in production. This will cause a the aggregate curve to the _____________

Answer 1

Answer:

It will shift to the right

Explanation: When the value to dollar in relation to other currencies increases,It will be favourable to the American investors as they will spend less in Dollar terms for the goods supplied and services rendered by citizens of other countries where the United States Dollars have a favourable exchange rate against their own currencies this will cause the AGGREGATE SUPPLY CURVE TO SHIFT TO THE RIGHT INDICATING A FAVOURABLE AGGREGATE SUPPLY.