If the U.S.demand for German goods increases,then

A) the U.S.current account deficit with Germany will improve.
B) Germany will experience currency devaluation.
C) the U.S.dollar will appreciate in value against the euro.
D) the euro will depreciate in value against the U.S.dollar.
E) the euro will appreciate in value against the U.S.dollar.

Question

Samantha Werlick · Accepted Answer

Final Answer : E, Explanation :  When the U.S. demand for German goods increases, it means that more U.S. dollars are being exchanged for euros to purchase those goods. This increased demand for euros (to buy German goods) typically leads to the appreciation of the euro against the U.S. dollar.

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