The following factors could lead to a Dollar Appreciation in the Long Run, EXCEPT: Question 26...
The following factors could lead to a Dollar Appreciation in the Long Run, EXCEPT:
Question 26 options:
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Decrease in domestic prices. |
|
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Increase in domestic productivity. |
|
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Increase in demand for US exports. |
|
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Increase in domestic interest rates |
Homework Answers
Appreciation of the dollar means the value of Dollar increases with respect to other currencies
In the given question below are some options given which need to be verified before giving a conclusion that the dollar is appreciated not
The decrease in domestic prices and increase domestic productivity are both interrelated because if productivity increases that means there will be more supply at lower prices than before so option B and A will be not taken
Increase in demand for us exports meaning exporting more items to other countries which means there is an appreciation of the dollar
But in option d, there is a domestic increase in interest rate which means people will have to pay more prices than before for the same good which will cause fall in dollar or depreciation of the dollar in the long run
So the answer is option d
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