An increase in the value of the dollar will ________ exports and ________ imports.
A) increase; increase
B) decrease; decrease
C) have no effect on; have no effect on
D) decrease; increase
E) increase; decrease

Question

Quizplus · Accepted Answer

When the value of the dollar increases, it makes U.S. exports more expensive for foreign buyers, leading to a decrease in exports. At the same time, it makes imports cheaper for American consumers and businesses, leading to an increase in imports. Therefore, an increase in the value of the dollar will decrease exports and increase imports.

An Increase in the Value of the Dollar Will ________