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How does currency appreciation affect exports?
Exports become more expensive, decreasing demand.
How does currency depreciation affect imports?
Imports become more expensive, decreasing demand.
How does currency depreciation affect exports?
Exports become cheaper, increasing demand.
How does currency appreciation affect imports?
Imports become cheaper, increasing demand.
How does a strong economy affect currency value?
It can lead to currency appreciation due to higher demand.
How does high inflation affect currency value?
It can lead to currency depreciation due to decreased demand.
If the peso appreciates, what happens to Mexican goods for foreigners?
Mexican goods become more expensive, decreasing exports.
If the Canadian dollar depreciates, what happens to Canadian goods for foreigners?
Canadian goods become cheaper, increasing exports.
How does decreased net exports affect aggregate demand?
It leads to a decrease in aggregate demand.
How does increased net exports affect aggregate demand?
It leads to an increase in aggregate demand.
Appreciation vs. Depreciation: Impact on export prices?
Appreciation: export prices rise. Depreciation: export prices fall.
Appreciation vs. Depreciation: Impact on import prices?
Appreciation: import prices fall. Depreciation: import prices rise.
Appreciation vs. Depreciation: Impact on net exports?
Appreciation: net exports decrease. Depreciation: net exports increase.
Appreciation vs. Depreciation: Impact on Aggregate Demand?
Appreciation: AD decreases. Depreciation: AD increases.
Exports vs. Imports: Which increases Aggregate Demand?
Exports increase AD, Imports decrease AD.
Trade Surplus vs. Trade Deficit: Which increases Net Exports?
Trade Surplus increases Net Exports, Trade Deficit decreases Net Exports.
Appreciation vs. Depreciation: Impact on domestic output?
Appreciation: output decreases. Depreciation: output increases.
Appreciation vs. Depreciation: Impact on domestic unemployment?
Appreciation: unemployment increases. Depreciation: unemployment decreases.
Appreciation vs. Depreciation: Impact on domestic price level?
Appreciation: price level decreases. Depreciation: price level increases.
Exports vs. Imports: Which one represents outflow of domestic currency?
Imports represent outflow of domestic currency.
What does a rightward shift of the AD curve indicate?
An increase in aggregate demand, potentially due to increased net exports.
What does a leftward shift of the AD curve indicate?
A decrease in aggregate demand, potentially due to decreased net exports.
On an AD/AS graph, what happens to the price level when AD shifts right?
The price level increases.
On an AD/AS graph, what happens to output when AD shifts right?
Output (real GDP) increases.
On an AD/AS graph, what happens to the price level when AD shifts left?
The price level decreases.
On an AD/AS graph, what happens to output when AD shifts left?
Output (real GDP) decreases.
How are the axes labeled on an AD/AS graph?
Price Level (vertical), Real GDP (horizontal).
What does the AD curve represent?
The total quantity of goods and services demanded at different price levels.
What does the AS curve represent?
The total quantity of goods and services supplied at different price levels.
How does an increase in net exports shift the AD curve?
It shifts the AD curve to the right.