If the value of the U.S. dollar changes from 1.2 euros to 1.4 euros, we would expect that the United States would experience a ________ in exports and a ________ in imports.
A) rise; rise B) fall; fall C) rise; fall D) fall; rise
Question 2
When there is a shortage of dollars in the foreign exchange market, the
A) U.S. exchange rate will appreciate.
B) supply curve of dollars shifts rightward to restore the equilibrium.
C) demand curve for dollars shifts leftward to restore the equilibrium.
D) U.S. exchange rate will depreciate.
E) supply curve of dollars shifts leftward to restore the equilibrium.
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