A rising exchange rate raises U.S. living standards by:
A)causing a balance of trade surplus.
B)discouraging imports.
C)encouraging exports.
D)helping to hold down inflation.

Question

Quizplus · Accepted Answer

A rising exchange rate makes imports cheaper and exports more expensive. While this can potentially worsen the trade balance by encouraging imports and discouraging exports, it can help to hold down inflation by making imported goods and services cheaper. This can raise U.S. living standards by increasing the purchasing power of consumers.

A Rising Exchange Rate Raises U