If the United States has full employment and the dollar dramatically depreciates in value, we can expect (other things equal)

Question

Quizplus · Accepted Answer

When the dollar depreciates in value, it means that more dollars are needed to buy goods and services from abroad, making imports more expensive. This can lead to increased prices domestically, contributing to inflation, especially if the economy is already at full employment and cannot easily increase output to meet the higher demand for domestic goods that results from the decreased attractiveness of foreign goods.

If the United States Has Full Employment and the Dollar