Expansionary fiscal policy example:

If foreign demand for dollars falls, it implies that fewer foreign consumers are interested in purchasing US goods. This decline in demand can lead to a decrease in exports, as fewer transactions are conducted in dollars, making it less attractive for foreign buyers to purchase American products.

While an initial rise in foreign demand for dollars could temporarily increase US exports, a subsequent fall in demand would likely lead to a decrease in exports. This choice does not accurately reflect a sustained relationship, as the overall trend would ultimately depend on the final state of demand, which could result in decreased exports rather than a consistent increase.

If foreign demand for dollars remains unchanged, it does not contribute to an increase in US exports. A constant demand indicates that foreign consumers are neither more nor less inclined to purchase US goods, which would not lead to any growth in export levels.