Which of the following events will tend to increase net exports of the United States?

Question

Quizplus · Accepted Answer

None of the given events will tend to increase net exports of the United States. A) An appreciation of the dollar will make U.S. exports more expensive for foreign consumers, leading to a decrease in demand for U.S. exports. B) An increase in the U.S. real interest rate will attract foreign investors, which will increase the demand for dollars and appreciate the dollar, making U.S. exports more expensive for foreign consumers, leading to a decrease in demand for U.S. exports. C) A fall in the real interest rate in several western European countries will make their investments less attractive, leading to a decrease in demand for dollars and depreciation of the dollar, making U.S. exports relatively cheaper for foreign consumers, leading to an increase in demand for U.S. exports. However, this event is not given as an option. Therefore, the answer is D.

Which of the Following Events Will Tend to Increase Net