One Effect of a Stronger Dollar Is

question 46

Multiple Choice

One effect of a stronger dollar is

• A) an increase in U.S. exports and a reduction in U.S. imports.
• B) a reduction in U.S. exports and an increase in U.S. imports.
• C) an increase in net exports.
• D) an increase in both imports and exports. The effect on net exports is uncertain.

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Definitions:

Protective Tariff

A tax imposed on imported goods to protect domestic industries from foreign competition by making the imported goods more expensive.

Tariff

A tax imposed by a government on goods and services imported from other countries.

Excise Tax

An indirect tax charged on the sale of a particular good or service, typically specific items such as alcohol, tobacco, and gasoline.

Revenue Tariff

A type of tariff that is primarily levied by a government with the objective of generating income rather than protecting domestic industries.