Holding other things constant,decreases in the price level in the US will
A)Cause the dollar to gain value
B)Cause the dollar to lose value
C)Does not affect the dollar value
D)None of the above

Question

Quizplus · Accepted Answer

A decrease in the price level in the US will increase the purchasing power of the dollar as goods and services become cheaper. This, in turn, will lead to an increase in the demand for dollars, causing the dollar to appreciate or gain value against other currencies.

Holding Other Things Constant,decreases in the Price Level in the US