Question

The dollar appreciates against foreign currencies. This makes foreign-produced goods __________ for Americans and U.S.-produced goods __________ for foreigners. As a result, U.S. __________ fall and U.S. __________ rise

Answer 1

The correct answers that fills the gaps are: cheaper; more expensive; exports; imports.

Step-by-step explanation:

In general terms, a revaluation means a deliberate adjustment of the official exchange rate of a country in relation to a chosen baseline. The baseline can be anything from salary rates to the gold price of a foreign currency. In a fixed exchange rate regime, only a decision of a country's government (that is, the central bank) can alter the official value of the currency.

In the event that a government has established that 10 units of its currency are equal to one United States dollar, upon revaluation, the government may change the rate to only five units per dollar. This would result in the local currency becoming twice as expensive for people who buy it with dollars as before and the dollar would cost only half for those who buy it with foreign currency.

Before the Chinese government revalued the yuan, it was linked to the United States dollar. It is now linked to a basket of world currencies.