An appreciation of the U.S. dollar

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates, it means that it has increased in value compared to other foreign currencies. This makes U.S. exports more expensive to foreign buyers since they have to pay more of their own currency to purchase the same amount of U.S. goods. On the other hand, imports become cheaper for U.S. consumers because they can now purchase more foreign goods with the same amount of dollars. This leads to a decrease in net exports since foreign buyers are less likely to purchase more expensive U.S. goods, while domestic consumers are more likely to purchase cheaper imported goods.

An Appreciation of the U.S. Dollar