Which of the following will not tend to happen if the U.S. dollar depreciates against the euro?
A) Europeans will ﬁnd U.S. goods become less expensive in euro terms.
B) Americans will ﬁnd European goods become more expensive in dollar terms.
C) Many Americans will switch and buy domestic goods instead of imports from Europe.
D) Many Europeans will switch and buy their own products instead of imports from the U.S.

Question

Quizplus · Accepted Answer

When the U.S. dollar depreciates against the euro, it means that the dollar is worth less compared to the euro. As a result, U.S. goods become cheaper for Europeans (A), and European goods become more expensive for Americans (B), which may lead Americans to buy more domestic goods (C). However, because U.S. goods are cheaper for Europeans, it is unlikely that Europeans would switch to buying their own products instead of imports from the U.S. (D). This makes D the correct choice as it is the event that will not tend to happen.

Which of the Following Will Not Tend to Happen If