Asked by Khansa Asikasari on May 05, 2024
Verified
What are the economic effects of an appreciation of the dollar relative to foreign currencies?
Appreciation
An increase in the value of an asset or currency over time.
Dollar
A widely used currency in international trade, often associated with the United States Dollar (USD), recognised by the symbol $.
- Examine the impact of currency appreciation and depreciation on global commerce and economic states.
Verified Answer
ME
Mandy EstradaMay 11, 2024
Final Answer :
Appreciation of the dollar means that it takes fewer dollars to obtain foreign currencies. This means that foreign goods become less expensive to Americans and import spending should rise as Americans shift from buying U.S. products to buying the now cheaper, foreign products. It also means that it takes more foreign currency to obtain U.S. dollars, and therefore, U.S. exports abroad should fall.
Learning Objectives
- Examine the impact of currency appreciation and depreciation on global commerce and economic states.
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