If the dollar appreciates relative to foreign currencies, we would expect the
A) multiplier to decrease.
B) country's exports and imports to both fall.
C) country's net exports to rise.
D) country's net exports to fall.

Question

Quizplus · Accepted Answer

If the dollar appreciates relative to foreign currencies, it becomes more expensive for foreign countries to purchase goods and services from the United States. This causes a decrease in exports and an increase in imports, which results in a decrease in net exports.

If the Dollar Appreciates Relative to Foreign Currencies, We Would