Question

If the pound sterling appreciates against the U.S. dollar, England buys _____ U.S. goods, causing the U.S. aggregate demand curve to shift to the _____. more; left fewer; right fewer; left more; right

Answer 1

Answer: More, Right

Explanation:

Appreciaton of a currency means the value of the currency has increased. When the pound sterling appreciates against the United States dollar, England will buy more of the products in the United States because the goods are cheaper when compared to their own currency.

Due to the increase in the United States product bought by England, the aggregate demand curve of the United States shifts to the right. The shift to the right of the aggregate demand curve shows that there is an increase in demand.