Arrange the following steps in the correct order to explain how an appreciation of the Euro affects the Songland dollar's economy: A) Increased demand for Songland exports due to cheaper prices, B) Appreciation of the Euro relative to the Songland dollar, C) Higher aggregate demand in Songland, D) Consumers in Songland experience a decrease in purchasing power.

To understand how the appreciation of the Euro affects the Songland dollar's economy, we start with step B, where the Euro becomes more valuable compared to the Songland dollar. This makes Songland's goods cheaper for Eurozone consumers, leading to step A, where there is increased demand for Songland exports. As more people buy these exports, the overall demand for goods and services in Songland rises, which is step C, resulting in higher aggregate demand in the economy. However, as the Euro appreciates, it can also mean that consumers in Songland have to spend more to buy imported goods, leading to step D, where they experience a decrease in purchasing power. For example, if a popular gadget from Europe costs 100 Euros, it might now cost more in Songland dollars, making it less affordable for local consumers.