When the U.S. dollar drops in value exports tend to:
A) go up, which decreases the trade deficit.
B) fall, which increases the trade deficit.
C) go up, which increases the trade deficit.
D) fall, which decreases the trade deficit.

Question

Quizplus · Accepted Answer

When the U.S. dollar drops in value, U.S. goods become cheaper for foreign buyers, leading to an increase in exports. This can help decrease the trade deficit as more goods are sold abroad.