To determine which option will shift the aggregate supply (AS) curve for the domestic economy to the left, we need to understand what factors generally cause a leftward shift in the AS curve. A leftward shift typically indicates a decrease in the total output at every price level, which can occur due to increased production costs, decreased productivity, or supply chain disruptions.
Here are the options analyzed:
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A depreciation of the U.S. dollar - This can increase the cost of imported inputs and materials, potentially raising production costs for domestic producers, which could lead to a leftward shift in the AS curve.
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An appreciation of the U.S. dollar - This usually makes imports cheaper and can lower production costs for domestic companies, potentially shifting the AS curve to the right.
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A depreciation of a foreign currency relative to the U.S. dollar - This would make foreign goods more expensive in the U.S., which may lead to increased costs if those goods are used as inputs, but it doesn’t directly impact the US-based AS in a straightforward way.
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No change in the U.S. dollar exchange rate - This would not affect the AS curve.
Based on the explanations above, the correct answer is:
A depreciation of the U.S. dollar.