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Determine the effect on the United States' aggregate demand for each of the scenarios described below.

User Daishi
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Final answer:

A decrease in foreign demand and a relative price increase of U.S. goods would have a negative effect on the United States' aggregate demand.

Step-by-step explanation:

A decrease in foreign demand and a relative price increase of U.S. goods would have a negative effect on the United States' aggregate demand. When foreign demand decreases, there is a decrease in exports, which leads to a decrease in aggregate demand. Additionally, when the relative price of U.S. goods increases, it makes U.S. goods more expensive compared to foreign goods, leading to a decrease in aggregate demand.

User Gabor Dolla
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