When the U

question 105

Multiple Choice

When the U.S. dollar appreciates against a foreign currency, U.S. goods become _______ expensive for people abroad and U.S. net exports _______.

• A) more; decrease
• B) less; increase
• C) more; increase
• D) less; decrease

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Definitions:

Substitute Goods

Goods that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Independent Goods

Products or services whose demand is not directly related to the demand for other goods; their consumption or purchase does not affect the consumption or purchase of other products.

Quantity Supplied

The amount of a good that producers are willing to sell at a given price over a specified period.

Quantity Demanded

The amount of a good or service consumers are willing and able to purchase at a given price.