Which of the following would increase the value of the dollar in the long run?

Question

Quizplus · Accepted Answer

An increase in the demand for American goods relative to goods from other countries would increase the demand for dollars as foreign buyers would need to exchange their currency for dollars to purchase American goods. This increased demand for dollars would likely lead to an increase in the value of the dollar in the long run.

None of the other choices would necessarily increase the value of the dollar in the long run. A increase in inflation in the United States relative to other countries (Choice A) would likely decrease the value of the dollar, as it would make American goods more expensive relative to goods from other countries. A decrease in U.S. tariffs on foreign goods (Choice C) may increase international trade, but it would not necessarily impact the value of the dollar. An increase in the supply of dollars on the foreign exchange market (Choice D) would likely decrease the value of the dollar as it would increase the supply of dollars relative to other currencies, leading to a depreciation of the dollar.

Which of the Following Would Increase the Value of the Dollar