A depreciation of the U.S. dollar typically influences production costs and aggregate supply in several ways. Here are the likely effects:
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A higher dollar price of imported resources: True. When the dollar depreciates, it takes more dollars to purchase the same quantity of foreign goods and resources, leading to higher costs for imported materials.
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A shift of the AS curve rightward: False. A depreciation usually raises production costs (particularly when resources are imported), which tends to shift the AS curve leftward rather than rightward.
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U.S. firms obtaining less foreign currency with each dollar: True. A weaker dollar means that U.S. firms will receive less foreign currency for their exports as the dollar value decreases compared to other currencies.
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A leftward shift of the AS curve: True. Increased production costs from more expensive imported resources typically shift the aggregate supply curve leftward, as firms may produce less due to higher costs.
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An increase in per-unit production costs from using imported resources: True. As the price of imported resources rises due to dollar depreciation, the per-unit production costs for U.S. firms will also increase.
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An increase in imported resources: False. With a depreciation of the dollar, imported resources become more expensive, which may lead to a decrease in the quantity of imported resources used.
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A lower dollar price of imported resources: False. A weaker dollar raises the dollar price of imported resources, not lowers it.
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A decrease in imported resources: True. Higher costs associated with importing resources can lead to a decrease in the quantity of such resources imported.
In summary, the correct choices are:
- A higher dollar price of imported resources
- U.S. firms obtaining less foreign currency with each dollar
- A leftward shift of the AS curve
- An increase in per-unit production costs from using imported resources
- A decrease in imported resources