If the U.S. exchange rate rises, the price to foreigners of U.S.-produced goods and services ________ and the quantity of U.S. dollars demanded ________.
A) rises; decreases
B) rises; increases
C) falls; decreases
D) falls; increases

Question

Quizplus · Accepted Answer

When the U.S. exchange rate rises, it means that the U.S. dollar is stronger compared to other currencies. This makes U.S.-produced goods and services more expensive for foreigners, leading to a decrease in the quantity of U.S. dollars demanded as fewer people can afford or are willing to buy these more expensive goods and services.

If the US Exchange Rate Rises, the Price to Foreigners of U