Practice Quiz

Praxis II Citizenship

Category - Economics

Start a Study Session Sign up for Question of the Day
If U.S. consumers started buying more domestic goods how would that affect the exchange rate of the dollar and the volume of U.S. exports?
  1. The value of the dollar would decrease and the U.S. would export more goods.
  2. The value of the dollar would increase and the U.S. would export more goods.
  3. The value of the dollar would increase and the U.S. would export fewer goods.
  4. The value of the dollar would decrease and the U.S. would export fewer goods.
Explanation
Answer: C - If U.S. consumers started buying more domestic (U.S.-produced) goods, the value of the dollar would increase and the U.S. would export fewer goods. The value of the dollar would increase because there would be fewer dollars in the international marketplace since the U.S. is spending less money in foreign markets by importing fewer goods. This appreciation (increase in value) of the dollar would cause the price of U.S. products to increase in foreign markets, and as cost increases, demand decreases.
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz