If the value of the Euro falls compared to the Dollar, what is the likely outcome...
If the value of the Euro falls compared to the Dollar, what is the likely outcome for the US balance of trade with the EU?
American exports to the EU fall
American imports from the EU fall
American imports from the EU rise
American exports to the EU rise
Homework Answers
Ans. a) American exports to the EU fall and c) American imports from the EU rise
If the value of the Euro falls compared to the Dollar, then the Euro will be depreciated and the Dollar will be appreciated. Now the US will receive more Euro for the same amount of dollar which means that American imports from the EU rise and American exports to the EU fall.
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If the value of the Euro falls compared to the Dollar, what is
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