If incomes decrease in the United States, Americans will buy more goods, including foreign goods.This increase in demand for foreign goods will cause an increase in the demand for Euros.

Question

Quizplus · Accepted Answer

If incomes decrease in the United States, Americans will typically have less disposable income to spend on goods, so the demand for goods, including foreign goods, is likely to decrease rather than increase. A decrease in demand for foreign goods would result in a decrease in the demand for Euros.

If Incomes Decrease in the United States, Americans Will Buy