If foreign manufacturers cut manufacturing costs and profit margins in response to a depreciation in the U.S.dollar,the effect of these actions is to:

Question

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If foreign manufacturers cut manufacturing costs and profit margins in response to a depreciation in the U.S. dollar, the effect of these actions is to lengthen the amount of time in which the depreciation leads to a smaller trade deficit. This is because the lower costs and profit margins will make foreign goods more competitive in the U.S. market, which will lead to increased exports and a smaller trade deficit.

If Foreign Manufacturers Cut Manufacturing Costs and Profit Margins in Response