Question

Which of the following is likely to occur following the depreciation of the United States dollar?

A) United States imports will increase
B) United States exports will increase
C) Demand for the United States exports will increase
D) United States demand for foreign currencies will increase
E) United States goods will become more expensive in foreign markets

Answer 1

The depreciation of the United States dollar is likely to result in an increase in United States exports. Option B

Step-by-step explanation:

When the United States dollar depreciates, it means that the value of the dollar decreases relative to other currencies. This makes goods and services produced in the United States relatively cheaper for foreign buyers. As a result, other countries are more likely to purchase U.S. exports, leading to an increase in U.S. exports.

For example, if the United States dollar depreciates against the euro, it means that it takes more dollars to purchase one euro. This makes U.S. goods more affordable for European buyers, which increases demand for U.S. exports to Europe. Option B