Question

A depreciation of the U.S. dollar makes American goods cheaper relative to foreign goods, resulting in...

A depreciation of the U.S. dollar makes American goods cheaper relative to foreign goods, resulting in a ________ in net exports in the U.S. and a ________ shift of the IS curve in the U.S., everything else held constant.

Select one:

a. fall; leftward

b. rise; leftward

c. fall; rightward

d. rise; rightward

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A currency depreciation makes domestically produced goods of US cheaper in rest of the world. Other countries will start buying goods produced in US at cheaper rates. This will increase the Net Exports of US.

The IS curve shows optimal combinations of output and interest rate in a goods market

AD = C + I + G + NX

Increase in NX will increase AD. The national output will increase due to rise in Demand. As a result, the IS curve will shift rightward

So, option d. Is correct

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
QUESTION 52 A decrease in U.S. interest rates leads to a. a depreciation of the dollar...
QUESTION 52 A decrease in U.S. interest rates leads to a. a depreciation of the dollar that leads to smaller net exports. b. a depreciation of the dollar that leads to greater net exports. c. an appreciation of the dollar that leads to greater net exports. d. an appreciation of the dollar that leads to smaller net exports. 1 points    QUESTION 53 As the price level falls, a. the exchange rate rises, so net exports fall. b. the exchange...
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can...
If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can buy 120 yen per U.S. dollar, a. both the U.S. dollar and the yen have appreciated. b. both the U.S. dollar and the yen have depreciated. c. the U.S. dollar has appreciated and the yen has depreciated. d. the U.S. dollar has depreciated and the yen has appreciated. If the U.S. dollar appreciates in the foreign exchange market, a. American goods will become more...
5. A depreciation of the U.S. exchange rate induces U.S. consumers to buy fewer domestic goods...
5. A depreciation of the U.S. exchange rate induces U.S. consumers to buy fewer domestic goods and fewer foreign goods. more domestic goods and more foreign goods. more domestic goods and fewer foreign goods. fewer domestic goods and more foreign goods. 6. Other things the same, if the exchange rate changes from 2.3 Dinar per dollar to 7.6 Dinar per dollar, then the dollar depreciates which causes US net exports to increase. appreciates, which causes US net exports to decrease....
1. A lower inflation rate in Canada relative to other countries causes the Canadian dollar to...
1. A lower inflation rate in Canada relative to other countries causes the Canadian dollar to appreciate because A) Canadian real interest rates fall. B) prices of Canadian resources fall in international markets. C) speculators anticipate depreciation of the Canadian dollar. D) Canadian products and services are relatively cheaper so exports to R.O.W. increase. E) Canadian products and services are relatively cheaper so imports from R.O.W. increase. 2. An inflationary gap results from A) appreciation of the C$ leading to...
5.           If the U.S. government wants to strengthen the dollar, it can: a)have the Fed use...
5.           If the U.S. government wants to strengthen the dollar, it can: a)have the Fed use monetary policy to reduce interest rates, thereby increasing capital flows into its country. b)reduce the supply of dollars on the international currency market by limiting the right of U.S. citizens to buy foreign currencies. c)have the Fed buy foreign currency, paying for it with newly printed dollars. d)Answers (a), (b), and (c) will all help the government to set the exchange rate at its...
When the price level rises and U.S. goods become relatively more expensive than foreign goods, there...
When the price level rises and U.S. goods become relatively more expensive than foreign goods, there will be: a. an upward movement along the aggregate demand curve. b. a downward movement along the aggregate demand curve. c. a leftward shift of the aggregate demand curve. d. a downward movement along the aggregate supply curve. e. a rightward shift of the aggregate demand curve. Beginning in the late 1970s, economic reform in China allowed farmers, for the first time, to keep...
1. Which of the following best describes the effects of an increase in real interest rates...
1. Which of the following best describes the effects of an increase in real interest rates in Canada? a. It discourages both Canadian and foreign residents from buying Canadian assets. b. It encourages both Canadian and foreign residents to buy Canadian assets. c. It encourages Canadian residents to buy Canadian assets, but discourages foreign residents from buying Canadian assets. d. It encourages foreign residents to buy Canadian assets, but discourages Canadian residents from buying Canadian assets. ____     2.   Which of the following...
8) If the deficit is financed by selling bonds to the ________, the money supply will...
8) If the deficit is financed by selling bonds to the ________, the money supply will ________, increasing aggregate demand, and leading to a rise in the price level. A) public; rise B) public; fall C) central bank; rise D) central bank; fall 9) Keynes's theory of the demand for money implies that velocity is A) not constant but fluctuates with movements in interest rates. B) not constant but fluctuates with movements in the price level. C) not constant but...
Question 1 A country’s exporters would want the country’s government to have a balanced budget because:...
Question 1 A country’s exporters would want the country’s government to have a balanced budget because: a.) the savings will shift to the right, increasing interest rates and the demand for dollars, raising the exchange rate, making the country’s exports cheaper, and giving exporters an advantage over foreign competitors. b.) the savings curve will shift to the right, reducing interest rates and the demand for dollars, lowering the exchange rate, making the country’s exports cheaper, and giving exporters an advantage...
13) Consumption a.         makes up about two-thirds of GDP in a typical year        b.         exceeds GDP...
13) Consumption a.         makes up about two-thirds of GDP in a typical year        b.         exceeds GDP in years when net exports are negative      c.         is much more volatile than investment, especially during recession years d.         is much more volatile than investment, especially during expansion years e.         has declined as a fraction of GDP over time 14) A household's net wealth is the value of a.         its current income minus the value of all its liabilities     b.         all its assets minus...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT