The goods produced in U.S. industries may be made more competitive in world markets by:

Question

Quizplus · Accepted Answer

Depreciating the U.S. currency would make American goods relatively cheaper in comparison to foreign goods, making them more competitive in world markets. This is because a weaker currency lowers the cost of exports and makes imported goods more expensive. Conversely, appreciating the U.S. currency would make American goods relatively more expensive, hurting their competitiveness in global markets. Keeping the exchange rate fixed or expanding the money supply may have little effect on the competitiveness of U.S. industries in the short run.

The Goods Produced in U