When the U.S. dollar appreciates against a foreign currency, U.S. goods become _______ expensive for people abroad and U.S. net exports _______.
A) more; decrease
B) less; increase
C) more; increase
D) less; decrease

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates, it becomes stronger against other currencies. This means that U.S. goods become relatively more expensive for people abroad, as their own currencies can buy fewer dollars. As a result, U.S. net exports decrease, as foreign demand for U.S. goods decreases.