What are the implications of a depreciation of the dollar?
A) The dollar buys more foreign currency, so it buys more foreign goods.
B) The dollar buys more foreign currency, so it buys fewer foreign goods.
C) The dollar buys less foreign currency, so it buys more foreign goods.
D) The dollar buys less foreign currency, so it buys fewer foreign goods.

Question

Quizplus · Accepted Answer

If the dollar depreciates, it means it buys less foreign currency. This makes foreign goods more expensive for Americans, so they will buy fewer foreign goods.

What Are the Implications of a Depreciation of the Dollar