GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a substantial increase in U.S. exports
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a substantial decrease in U.S. imports
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rising price inflation in the United States
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flows of foreign investment into the United States
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Detailed explanation-1: -The Plaza Accord was a 1985 agreement among the G-5 nations of France, Germany, the U.K., the U.S., and Japan. The goal of the Plaza Accord was to weaken the U.S. dollar in order to reduce the mounting U.S. trade deficit.
Detailed explanation-2: -Export costs rise: If the U.S. dollar appreciates, foreigners will find American goods more expensive because they have to spend more for those goods in USD. That means that with the higher price, the number of U.S. goods being exported will likely drop.
Detailed explanation-3: -Changes in the value of a currency are influenced by supply and demand. Currencies are bought and sold, just like other goods are. These transactions mainly take place in foreign exchange markets, marketplaces for trading currencies.
Detailed explanation-4: -The U.S. dollar is strengthening because the Fed adopted a hawkish monetary policy stance in response to skyrocketing inflation. It has lifted the federal funds rate from near zero at the beginning of 2022 to a range of 3.75% to 4% at the November FOMC meeting.