Deflation in the United States would tend to make the exchange value of the dollar depreciate.

Question

Quizplus · Accepted Answer

Deflation refers to a decrease in the general price level of goods and services in an economy. This would typically make the value of the dollar appreciate, as consumers and investors would be willing to pay more for the same amount of goods and services. Depreciation of the dollar would be more likely to occur in the case of inflation, where there is an increase in the general price level of goods and services.

Deflation in the United States Would Tend to Make the Exchange