Answer :
If the value of the United States dollar increases on the foreign exchange market, Aggregate demand will decrease in the short run.
Why is this so?
An increase in the value of the US dollar reduces net exports and pushes the aggregate demand curve lower and to the left, reducing output, according to the aggregate demand and supply analysis.
Export expenses are rising. Foreigners will find American goods more expensive when the US dollar increases because they must pay more in USD. The amount of US items exported is expected to fall as a result of the price rise.
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Full Question:
Although part of your question is missing, you might be referring to this full question:
If the value of the United States dollar increases on the foreign exchange market, which of the following is most likely to occur in the short run?
