--%>

Effects of that depreciation or appreciation

Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or appreciate?  Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports?

E

Expert

Verified

A decline in U.S. incomes or a weakening of U.S. preferences for foreign goods would reduce U.S. imports, reducing U.S. demand for foreign currencies. These currencies would depreciate (the dollar would appreciate). Dollar appreciation means U.S. exports would decline and U.S. imports would increase.

   Related Questions in Business Economics

  • Q : Main advantage of EVA The main

    The main advantage of using EVA is that it is simple to calculate and understand. It uses simple measures like operating profits and cost of capital terms which are widely known and accepted in the financial arena. It helps the managers to assess thei

  • Q : Decomposition of Private Sector Can

    Can someone help me in finding out the right answer from the given options. The private sector is decomposed into: (1) Businesses and investors. (2) Households and stockholders. (3) Households and investors. (4) Businesses and households.

  • Q : Illustrate the advantage and

    Illustrate the advantage and disadvantage of Corporations?

  • Q : Problem on current production

    I have a problem in economics on current production possibilities frontier. Please help me in the following question. The combination of 70 units of clothing and 30 units of food are: (1) Completely employs the economy's capacity. (2) Would leave most

  • Q : Impact of dollar on aspects of

    Question Discuss the impact of dollar depreciation on the various aspects of American Economy. Devaluation of the DollarIntroduction:

  • Q : Illustrate Scarcity and choice of

    Illustrate Scarcity and choice of Economic Perspective?

  • Q : Organization identify the reasons for

    identify the reasons for the formation of organizations

  • Q : Raising consumer surplus problem For

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

  • Q : Why do governments enact trade barriers

    Why do governments enact trade barriers?

  • Q : Free rider problem Question: Explain

    Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good. Answer: