Asked by
Frances Mayorga
on Nov 26, 2024
Verified
Other things being equal, which of the following is a necessary consequence of a depreciation of the U.S. dollar against other currencies?
A) The terms of trade will move in favor of the United States.
B) The United States will experience an increase in the volume of imports.
C) International speculators will buy U.S. dollars and sell other currencies.
D) U.S. exports will become cheaper relative to other nations' products.
Depreciation
The process through which an asset loses value over time due to use, wear and tear, or obsolescence.
Terms of Trade
The ratio at which a country's exports exchange for its imports, influencing the country's economic health.
U.S. Dollar
The official currency of the United States, widely used as a benchmark in international trade and financial transactions.
- Learn about the repercussions of exchange rate movements on the comparative worth of national currencies.
- Gain insight into the dynamics of currency appreciation and depreciation.
- Interpret the correlation between modifications in currency demand and supply and their implications on market worth.
Verified Answer
SS
Learning Objectives
- Learn about the repercussions of exchange rate movements on the comparative worth of national currencies.
- Gain insight into the dynamics of currency appreciation and depreciation.
- Interpret the correlation between modifications in currency demand and supply and their implications on market worth.