ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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European exports to the United States would become less expensive.
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U.S. exports to Europe would become cheaper.
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European imports from the United States would increase.
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U.S. imports from Europe would become more expensive.U.S. imports from Europe would become more expensive.
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Detailed explanation-1: -A falling dollar diminishes its purchasing power internationally, and that eventually translates to the consumer level. For example, a weak dollar increases the cost to import oil, causing oil prices to rise. This means a dollar buys less gas and that pinches many consumers.
Detailed explanation-2: -If the value of the US dollar declines in relation to other currencies, goods imported into the United States will: not be allowed to enter the country.
Detailed explanation-3: -If the dollar depreciates in value, making U.S. goods cheaper overseas, American exports usually rise. The volume of imports may drop, as imported goods become more expensive. Some people will switch to American-made goods rather than pay the higher import price.
Detailed explanation-4: -If the value appreciates (or goes up), demand for the currency also rises. In contrast, if a currency depreciates, it loses value against the currency against which it is being traded.