Ceteris paribus, if the dollar appreciated in relation to a foreign currency, would the U.S. sell more goods or fewer goods to consumers in that foreign country? Why?
If the dollar appreciated we would expect U.S. firms to sell fewer goods to those foreign consumers. A higher exchange rate value of the dollar would make it more costly for foreign consumer to purchase U.S. dollars. As a result, those consumers would tend to purchase fewer U.S. goods.
Economics
You might also like to view...
Why do countries impose protection even if it lowers economic welfare? Explain fully
What will be an ideal response?
Economics
Which of the following will shift the demand curve for capital leftward?
a. Introduction of supercomputers in the resource market b. A fall in the market interest rates c. An increase in the price of capital d. Business expectations of increased regulations e. A rise in the equilibrium wage of labor
Economics