If the U.S. dollar continues to be weak compared with the euro for the long term, it will
A) encourage European companies to increase the export of goods to the U.S.
B) encourage European companies to make direct investments in the U.S. to manufacture goods here.
C) encourage U.S. companies to import European goods
D) discourage European companies from making direct investments in the U.S. to manufacture goods here.

Question

Quizplus · Accepted Answer

A weak U.S. dollar makes it cheaper for European companies to invest in the U.S. as their euros convert to more dollars, encouraging them to manufacture goods in the U.S. to save on costs and potentially avoid tariffs.

If the US Dollar Continues to Be Weak Compared with the Euro