Answer:
The best answers to the two blank spots in the question: A appreciation of the U.S dollar makes foreign goods cheaper relative to American goods, resulting in a ____ in net exports in the U.S. and a ____ shift if the IS curve in the U.S., everything else held constant, would be: 1. decrease, or fall, of net exports in the U.S and 2. left shift of the IS curve.
Explanation:
In economics, many factors will influence how products, services, goods, sales, income, exports, imports, and many more elements of economics, will work. But essentially, and for the purpose of this particular question, when the cost of the dollar (appreciation) rises, meaning buying something produced in the U.S costs more because of that appreciation, then, foreign goods, whose currencies are less appreciated than the dollar, will become cheaper, and thus, preferrable. This will directly impact the export activities because people will prefer products that are cheaper in cost. As this happens, and almost as a chain reaction, the IS curve, which is a representation of the combination of incomes and real interest rates, will tend to the left, as the American goods and services are less elected by consumers because they are more expensive.
