What Happens If the Brazilian Real Appreciates Relative to the U.S

question 271

Multiple Choice

What happens if the Brazilian real appreciates relative to the U.S. dollar?

• A) Brazilians will buy fewer U.S. goods, which generates an increase in the quantity supplied of dollars.
• B) The quantity demanded of reals increases as U.S. residents want to buy more Brazilian products.
• C) The quantity of reals supplied increases because the lower price (in reals) for U.S. goods induces Brazilians to buy more U.S. products.
• D) The U.S. Federal Reserve Bank increases the supply of dollars to the world economy.