Answer to Question #111103 in Macroeconomics for zukile

Question

Based on the international trade effect, how would an increase in the price level in South Africa affect the exchange rate and aggregate demand?
1.Rand will appreciate; the quality of aggregate demand will decrease.
2.Rand will depreciate; the quality of aggregate demand will increase.
3.Exchange rate will remain unchanged; the aggregate demand will decrease.
4.Exchange rate will increase; the aggregate demand will increase.

Answer 1

Alternative d) is the correct