A fall in the value of the dollar against other currencies would cause what

Question

would it cause a right ward shift of the aggregate demand curve. explain

Answer 1

A relative depreciation of dollar would mean fall in real purchasing power of $-holders on foreign markets, but effect on domestic US market would be much less. So aggregate demand ensured by US customers purchasing power on international market will shift left (will be reduced).

At the same time for local producers it would became relatively more profitable to export US goods thus it would lead to fall in domestic supply, and this effect will be accompanied by fall in imports (due to decrease of $ purchasing power). So domestic aggregate supply will fall due to these both effects.

But it is only first-wave of cause-effect chain, next consequent steps are a bit more complex.

Actually reasons "why dollar depreciated?" should be given before starting analysis - and also model should be specified. For instance Mundel-Flemming model may explain process a bit different way (though it will provide more demand-side details).