Question

Suppose the U.S. dollar appreciates against the Hungarian forint. What is a likely consequence?

Answer 1

When the U.S. dollar appreciates against the Hungarian forint, it becomes cheaper for Americans to buy goods and services from Hungary, but Hungarian exports to the U.S. become more expensive, leading to a trade imbalance.

Step-by-step explanation:

When the U.S. dollar appreciates against the Hungarian forint, it means that one U.S. dollar can buy more Hungarian forint. As a result, it becomes cheaper for Americans to buy goods and services from Hungary, and Hungarian exports to the U.S. become more expensive. This can lead to an increase in U.S. imports from Hungary and a decrease in Hungarian exports to the U.S., resulting in a trade imbalance between the two countries.