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Suppose the French Decide They Like American Goods So Much

Question 206

Multiple Choice

Suppose the French decide they like American goods so much that they want to buy more from the United States. What is the MOST likely chain of events that will arise from this scenario?


A) The French compete with the Germans for euros used to purchase dollars; the euro appreciates, and the dollar depreciates; and U.S. goods become cheaper.
B) Americans supply more dollars; the dollar depreciates; and U.S. goods become less expensive.
C) Americans see the increased demand for U.S. goods and raise prices in the United States, which leads to an appreciation of the euro.
D) The French demand more dollars; the dollar appreciates; and U.S. goods become more expensive.

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