If the United States has a consistent trade deficit with another country (we import more from it than we export to it), the US dollar will ____ against that country's currency.

Question

Quizplus · Accepted Answer

When a country consistently imports more than it exports with another country, it means there is an excess supply of the other country's currency in the foreign exchange market. This excess supply leads to a decrease in demand for the US dollar, causing it to weaken against the other country's currency.

If the United States Has a Consistent Trade Deficit with Another