Refer to Political Instability Abroad. What would happen to the dollar?
A)It would appreciate in foreign exchange markets making U.S goods more expensive compared to foreign goods.
B)It would appreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods.
C)It would depreciate in foreign exchange markets making U.S. goods more expensive compared to foreign goods.
D)It would depreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods.

Question

Quizplus · Accepted Answer

Political instability abroad often leads to an appreciation of the dollar as investors seek a safe haven, making U.S. goods more expensive compared to foreign goods.