If the Brazilian demand for American exports rises at the same time that U.S. productivity rises relative to Brazilian productivity,then,in the long run,________,everything else held constant.

Question

Quizplus · Accepted Answer

Increased demand for American exports by Brazil will lead to a higher demand for the U.S. dollar, appreciating its value. Simultaneously, higher U.S. productivity relative to Brazil's makes American goods more competitive, further increasing demand for the dollar and decreasing demand for the real, leading to the depreciation of the Brazilian real relative to the U.S. dollar.

If the Brazilian Demand for American Exports Rises at the Same