Appreciation of the dollar: a. means that Americans pay more for a foreign currency. b. means that foreigners pay less for a U. S. dollar. c. will increase the prices of American exports and decrease the prices of American imports. d. will decrease the prices of American exports and increase the prices of American imports.

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Wheeler

Business

23 September, 14:30

Appreciation of the dollar: a. means that Americans pay more for a foreign currency. b. means that foreigners pay less for a U. S. dollar. c. will increase the prices of American exports and decrease the prices of American imports. d. will decrease the prices of American exports and increase the prices of American imports.

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Alvin Forbes · Answer 1

c. will increase the prices of American exports and decrease the prices of American imports.

Explanation:

Appreciation of the dollar means a gain in strength by the dollar. In the foreign exchange, a strong dollar means other currencies will be relatively weaker when compared to the dollar. One unit of the dollar will purchase more of other currencies.

A strong dollar makes American products more expensive in international markets. Anyone willing to import from the US will need to convert their local currency to dollars. If the dollar is strong, they have to use more of their currency to purchase dollars. This makes American products expensive. Imports will be cheaper as fewer dollars will be required to make international payments on foreign goods and services.