Aggregate demand increases if the exchange rate
or foreign income
ol
O A. decreases, increases
B. decreases, decreases
o C. increases, decreases
( D. increases increases
U

Aggregate demand increases if the exchange rate decreases or foreign income increases.

Option: A

Explanation:

In economics demand and supply plays a vital role in studying market policy. When price fall demand increases and when price increases eventually demand decreases. Aggregate demand increases when exchange rate decreases or foreign income increases.

Exchange rate means involvement of money in import and export of commodity. It includes tariff. High exchange rate decreases the demand of product. Increasing foreign income enhance the capability of purchasing more products. And aggregate demand demand decreases when exchange rate increases and foreign income decreases.