A U.S. dollar appreciation may result when U.S. tastes and preferences shift toward foreign goods.

Question

Quizplus · Accepted Answer

A U.S. dollar appreciation occurs when the value of the U.S. dollar increases relative to other currencies. If U.S. tastes and preferences shift toward foreign goods, this would lead to an increase in imports and a decrease in demand for domestic goods. This could potentially lead to a trade deficit, which could put downward pressure on the value of the U.S. dollar. Therefore, a U.S. dollar appreciation is unlikely in this scenario.

A US Dollar Appreciation May Result When U