Question

An appreciation of the U.S. dollar will likely cause U.S. exports to ________ and U.S. imports...

An appreciation of the U.S. dollar will likely cause U.S. exports to ________ and U.S. imports to ________.

decrease; decrease

increase; decrease

increase; increase

decrease; increase

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Answer #1

An appreciation of the US dollar will likely cause exports to decrease and US imports to increase, because when the dollar appreciates it means people who are interested in importing the goods from other countries will have to pay few dollars for the goods imported from other countries and people who are interested in importing the goods from the US will have to pay a higher price for the goods being imported from US therefore they reduce their demand for the US goods which will decrease the exports.

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