If the United States imports more than it exports,then
A)the supply of dollars is likely to exceed the demand in the foreign exchange market,ceteris paribus.
B)one can infer that the U.S.dollar would be under pressure to depreciate against other currencies.
C)the supply of dollars is likely to exceed the demand in the foreign exchange market,ceteris paribus,and one can infer that the U.S.dollar would be under pressure to depreciate against other currencies.
D)none of the options

Question

Quizplus · Accepted Answer

When a country imports more than it exports, the demand for foreign currency increases, leading to an excess supply of the domestic currency (dollars in this case) in the foreign exchange market. As a result, the value of the dollar would likely decrease (depreciate) relative to other currencies as more dollars flood the market. Therefore, both A and B are correct, and the best choice is C, as it includes both options.

If the United States Imports More Than It Exports,then