As the dollar price of a foreign currency (for example, dollars per yen) increases, dollars will be demanded by foreigners, U. S. goods will be expensive for foreigners, U. S. goods will be purchased by foreigners, and foreign currency will be supplied to the foreign exchange market.

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He interest rate effect is the change in real gdp caused by the federal reserve adjusting target interest rates. is the change in consumer and investment spending due to changes in interest rates resulting from changes in the aggregate price level. is the change in exports and imports, resulting from changes in the interest rate caused by changes in the aggregate price level. is the change in investment spending and government purchases caused by changes in money demand. is the change in interest rates, caused by changes to government purchases.