Question

if the general price level increases explain what will happen to aggregate spending according to thr exchange rate effect

Answer 1

When general price level increases, the country's good will be less attractive to customers from other countries and as a result exports of the country reduces. On the other hand when general price level increases interest rates are likely to increase. As a result there will be capital inflows in to the country. When more foreign capital flows into the country, the domestic currency appreciates and exchange rates increases, this will also reduce the net exports of the country and aggregate spending reduces.