An appreciation of the U.S. dollar

Question

Quizplus · Accepted Answer

An appreciation of the U.S. dollar increases the purchasing power of the U.S. dollar in foreign markets for goods and services. This means that the U.S. dollar can buy more goods and services in foreign countries. It does not necessarily mean a decrease in the consumer price level or an increase in the domestic consumer price level. Conversely, a decrease in the value of the U.S. dollar, or a depreciation, would decrease the purchasing power of the U.S. dollar in foreign markets.

An Appreciation of the U.S. Dollar