Asked by Raney Sumpter on May 04, 2024
Verified
What are the economic effects of a depreciation of the dollar relative to foreign currencies?
Depreciation
The decrease in value of an asset over time, often due to wear and tear or obsolescence.
Dollar
A unit of currency used in various countries, notably the United States, and recognized by its symbol $.
- Investigate how fluctuations in currency value influence international trade and the overall economic environment.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
Depreciation means that it takes more dollars to buy foreign currencies. This means that foreign goods become more expensive to Americans and imports should decline as Americans shift to spending more on U.S. products. It also means that foreign consumers can obtain more dollars with their currency, and therefore, foreign purchases of U.S. exports abroad should rise.
Learning Objectives
- Investigate how fluctuations in currency value influence international trade and the overall economic environment.
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