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