Question

If the United States imports more than it exports, then this means that Group of answer choices the demand for dollars is likely to exceed the supply in the foreign exchange market, ceteris paribus, and the U.S. dollar would be under pressure to appreciate against other currencies. the U.S. dollar would be under pressure to appreciate against other currencies. the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus. the demand for dollars is likely to exceed the supply in the foreign exchange market, ceteris paribus.

Answer 1

the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.

Step-by-step explanation:

In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.

The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.

Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.

If the United States imports more than it exports, then this means that the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.

Generally, when import exceeds export there would be a deficit in the financial account of the country.

Hence, a deficit on the current account is because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.