What is the "good news" and the "bad news" about a lower value of the U.S. dollar?
What will be an ideal response?
The "good news" about a lower value of the dollar is that U.S. goods become less expensive to residents of other countries and so they buy more of them and U.S. exports increase. The "bad news" is that a lower value of the dollar will make it more expensive for U.S. residents to buy foreign goods.
You might also like to view...
Refer to the graph below, which shows the supply and demand for British pounds. D1 and S1 represent the initial demand and supply curves. If there is a huge increase in the desire of U.S. buyers to consume UK products, and the British government starts buying U.S. dollars in order to fix the exchange rate at the initial level, then the new equilibrium will be at point:
A. F
B. J
C. C
D. H
Which of the following statements is incorrect?
A. Budget deficits raise the national debt. B. The concepts of deficit and debt are closely related. C. Getting rid of the deficit eliminates accumulated debt. D. Budget surpluses lower the national debt.