If the Exchange Rate Changes from $1 = 2 Euros

question 63

Multiple Choice

If the exchange rate changes from $1 = 2 euros to $1 = 3 euros:

• A) the dollar has appreciated in value.
• B) the dollar has depreciated in value.
• C) the dollar has neither appreciated nor depreciated,but the euro has appreciated in value.
• D) U.S.exports to Europe will increase.

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Definitions:

Importing

The process of bringing goods or services into a country from abroad for sale.

Domestically Produced

Referring to goods manufactured or services provided within a country’s borders, as opposed to imported from other countries.

Foreign Countries

are nations other than one's own, encompassing different governments, cultures, languages, and geographic locations outside of a person's native country.

Trade Restrictions

Regulations and policies that governments impose to control the free exchange or movement of goods between countries.