Author Question: What is the good news and the bad news about a higher value of the U.S. dollar? What will be an ... (Read 36 times)

scienceeasy · **on:** Jun 29, 2018

What is the good news and the bad news about a higher value of the U.S. dollar?

What will be an ideal response?

Question 2

Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in

A) potential GDP.
B) the money wage rate.
C) the buying power of money.
D) the real interest rate.
E) the price of domestic goods and services relative to foreign goods and services.

karlss · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The good news about a higher value of the dollar is that a higher value will make it less expensive for U.S. residents to buy foreign goods. The bad news is that U.S. goods become more expensive to residents of other countries, so they buy less of them and U.S. exports decrease.

Answer to Question 2

C