According to the "beachhead effect," in order to undo the effects of a strong-dollar period,the real value of the dollar
A)must fall to at least half of its value before appreciation of the dollar began.
B)must fall to the value it had before appreciation of the dollar began.
C)must fall to a much lower level than it had before appreciation of the dollar began.
D)must actually appreciate before it depreciates to undo the effects of a strong-dollar period.

Question

Quizplus · Accepted Answer

The beachhead effect suggests that the real value of the dollar must fall to a much lower level than it had before appreciation of the dollar began in order to undo the effects of a strong-dollar period. This is because during a strong-dollar period, other currencies and economies become accustomed to the high value of the dollar, making it difficult to reverse the effects without a significant depreciation of the dollar. Therefore, choice C is the best answer.

According to the "Beachhead Effect," in Order to Undo the Effects