When the dollar depreciates,each dollar buys
A)more foreign currency,and so buys more foreign goods.
B)more foreign currency,and so buys fewer foreign goods.
C)less foreign currency,and so buys more foreign goods.
D)less foreign currency,and so buys fewer foreign goods.

Question

Quizplus · Accepted Answer

When the dollar depreciates, it means that the value of the dollar in relation to other currencies has decreased. Therefore, it will take more dollars to purchase the same amount of foreign currency. This means that there will be less foreign currency that can be purchased with each dollar, leading to the purchase of fewer foreign goods.

When the Dollar Depreciates,each Dollar Buys