A depreciation of the U.S. dollar
A. makes U.S. exports more expensive in terms of foreign currency and imports less expensive in terms of the dollar, increasing net exports.
B. makes U.S. exports more expensive in terms of foreign currency and imports less expensive in terms of the dollar, decreasing net exports.
C. makes U.S. exports less expensive in terms of foreign currency and imports more expensive in terms of the dollar, increasing net exports.
D. makes U.S. exports less expensive in terms of foreign currency and imports more expensive in terms of the dollar, decreasing net exports.
Answer: C
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A) it holds its value. B) there is no cost to holding money as an asset. C) it grows in value. D) it is highly liquid.
Because of the income effect, the labor supply curve is
A) eventually backward bending as wage rate increases. B) positively sloped. C) horizontal. D) vertical.