The U.S. trades with many countries within the European Union. If the European Union falls into a recession, the demand for U.S. dollars will shift to the _____, indicating a _____ in the demand for the U.S. dollar.

Question

Quizplus · Accepted Answer

If the European Union falls into a recession, their demand for U.S. goods and services will decrease. Therefore, they will need fewer U.S. dollars to trade with the U.S. Thus, the demand for the U.S. dollar will shift to the left, indicating a fall in demand for the U.S. dollar.

The US Trades with Many Countries Within the European Union