An increase in the value of the U.S. dollar relative to foreign currencies would lead to
A)an increase in U.S. exports and a decrease in U.S. imports
B)a decrease in U.S. exports and an increase in U.S. imports
C)an increase in both U.S. imports and U.S. exports
D)a decrease in both U.S. exports and U.S. imports
E)no change in exports and an increase in U.S. imports

Question

Quizplus · Accepted Answer

An increase in the value of the U.S. dollar relative to foreign currencies makes U.S. goods and services more expensive for foreigners to buy, leading to a decrease in U.S. exports. At the same time, it makes foreign goods and services cheaper for Americans to buy, leading to an increase in U.S. imports.

An Increase in the Value of the U