If the value of the U.S. dollar changes from 1.2 euros to 1.4 euros, we would expect that the United States would experience a ________ in exports and a ________ in imports.

Question

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When the value of the U.S. dollar decreases relative to another currency, such as the euro, exports become relatively cheaper for the foreign market, which increases demand for U.S. goods and thus, exports rise. Meanwhile, imports become relatively more expensive for domestic consumers, leading to an overall decrease in imports. Thus, a decrease in the value of the U.S. dollar (from 1.2 euros to 1.4 euros) would result in a rise in exports and a rise in imports.

If the Value of the U