Question
As a result of a decrease in the value of the Rand in relation to other currencies, South African imports decrease and exports increase. Consequently, there is a(n):
increase in short-run aggregate supply
increase in aggregate demand
decrease in the quantity of aggregate output demanded
decrease in the quantity of aggregate output supplied in the short-run
increase in short-run aggregate supply
increase in aggregate demand
decrease in the quantity of aggregate output demanded
decrease in the quantity of aggregate output supplied in the short-run
Answers
GPT-4o mini
When the value of the Rand decreases relative to other currencies, South African exports become cheaper for foreign buyers, leading to an increase in exports. At the same time, imports become more expensive for South Africans, which can lead to a decrease in imports.
This situation typically stimulates aggregate demand, as the increase in exports contributes to higher demand for goods and services produced in South Africa. Given this context, the most appropriate answer from your options would be:
**increase in aggregate demand**
This occurs because higher exports and lower imports both contribute to a net increase in demand for domestically produced goods and services.
This situation typically stimulates aggregate demand, as the increase in exports contributes to higher demand for goods and services produced in South Africa. Given this context, the most appropriate answer from your options would be:
**increase in aggregate demand**
This occurs because higher exports and lower imports both contribute to a net increase in demand for domestically produced goods and services.