In general, trade restrictions penalize domestic producers and foreign consumers.

Explain and show graphically the effect of a decrease in U.S. budget deficits that decrease U.S. interest rates on the demand and supply of U.S. dollars for euros

What will be an ideal response?

Suppose the U.S. dollar gains strength against the euro (and against other major currencies). This strengthening of the dollar will cause which of the following to occur?

A) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the right. B) The aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the right. C) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the left. D) the aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the left.