Question

If the dollar appreciates relative to the Euro then: Multiple Choice European cars will become less expensive in the United States. American cars will become less expensive in Europe. the price of cars will not be affected. European cars will become more expensive in the United States. American cars will become less expensive in the United States.

Answer 1

The correct answer is letter "A": European cars will become less expensive in the United States.

Step-by-step explanation:

When a currency appreciates over another it means its value is greater than the other. For instance, if the dollar appreciates over the euro, all European items will be cheaper in countries where the dollar is the official currency. Besides, American items will be expensive in countries where the euro is the official currency for trade.

Therefore, European cars in the U.S. will be less expensive.