One effect of a stronger dollar is
A) an increase in U.S. exports and a reduction in U.S. imports.
B) a reduction in U.S. exports and an increase in U.S. imports.
C) an increase in net exports.
D) an increase in both imports and exports. The effect on net exports is uncertain.

Question

Quizplus · Accepted Answer

A stronger dollar makes U.S. goods relatively more expensive for foreign buyers and American consumers find imports relatively cheaper. This tends to reduce U.S. exports and increase U.S. imports, resulting in a trade deficit.

One Effect of a Stronger Dollar Is