Which of the Following Would Increase the Value of the Dollar

question 152

Multiple Choice

Which of the following would increase the value of the dollar in the long run?

• A)an increase in inflation in the United States relative to other countries
• B)an increase in the demand for American goods relative to goods from other countries
• C)a decrease in U.S.tariffs on foreign goods
• D)an increase in the supply of dollars on the foreign exchange market

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Definitions:

Increase Spending

A rise in the amount of money that consumers, businesses, or governments are expending, which can stimulate economic activity.

Nominal Value

The face value of a currency or security, not adjusted for inflation or interest; the stated value.

Real Value

The value of an object, good, or service that has been adjusted for inflation, representing the purchasing power over time.

Good X

A placeholder term often used in economics to represent a generic good or product in theoretical models and discussions.