When the U.S. dollar appreciates against a foreign currency, U.S. goods become:
A) more expensive to people abroad, and we expect net exports to decrease.
B) less expensive to people abroad, and we expect net exports to increase.
C) more expensive to people abroad, and we expect net exports to increase.
D) less expensive to people abroad, and we expect net exports to decrease.

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates against a foreign currency, U.S. goods become more expensive to people abroad. As a result, we expect net exports to decrease. This is because foreign consumers can purchase fewer U.S. goods for the same amount of their own currency.