Answer: The dollar will appreciate
Step-by-step explanation:
Here is the complete question:
American auto companies make a breakthrough in automobile technology and are able to produce a car that gets 200 miles to the gallon, what will happen to the U.S. dollar exchange rate?
Appreciation of a currency simply means that the value of a particular currency has risen when compared to another currency. In this situation, the value of the dollar will rise against other currencies.
This.is because the increase in production in the United States will let to an increase in the exchange rate I the future which will lead to a rise in the dollars expected return.