Lower tariffs on U.S.agricultural imports cause the dollar to ____ in the ____.

Question

Quizplus · Accepted Answer

Lower tariffs on U.S. agricultural imports will make it cheaper for foreigners to purchase U.S. agricultural products. This will increase the demand for dollars in the short run, leading to an appreciation of the dollar. However, in the long run, as U.S. agricultural producers increase their exports to take advantage of the lower tariffs, the supply of dollars in the foreign exchange market will increase, causing the dollar to depreciate.

Lower Tariffs on U