Question

Which of the following is correct? Multiple Choice A decrease in the international value of the...

Which of the following is correct?

Multiple Choice

  • A decrease in the international value of the dollar will reduce U.S. agricultural exports.

  • Changes in the international value of the dollar have no effect on U.S. agricultural exports.

  • An increase in the international value of the dollar will reduce U.S. agricultural exports.

  • The rapid expansion of foreign incomes will reduce U.S. agricultural exports.

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Homework Answers

Answer #1

Answer C

A decrease in international dollar value indicates that the countries can now buy more goods for the same amount of money. Therefore the agricultural exports from the US 'increases' due to the cheaper prices.

Similarly on the flipside, an increase in the international dollar value means the countries will import less from the US because of the imports being expensive and not cheap anymore. Therefore the US agricultural exports decrease. Hence option C is correct.

Expansion of foreign incomes doesn't necessarily have an explicit impact on agricultural exports from US.

Hope this helps. Do hit the thumbs up. Cheers!

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