If the dollar appreciates, foreigners will tend to respond by
A)decreasing the quantity demanded of American-made goods.
B)increasing the quantity demanded of American-made goods.
C)decreasing the demand of American-made goods.
D)increasing the demand of American-made goods.

Question

Quizplus · Accepted Answer

When the dollar appreciates, foreign currencies become relatively weaker making imports from foreign countries cheaper while American goods become relatively more expensive. Therefore, foreigners tend to decrease the quantity demanded of American-made goods.

If the Dollar Appreciates, Foreigners Will Tend to Respond by