Asked by Perla Alvarado on Apr 30, 2024
Verified
A reduction in the price of the dollar in terms of the euro,Germany's currency,will have the result of
A) increasing the supply of products purchased from Germany.
B) increasing the demand for U.S.products exported to Germany.
C) decreasing the price of products purchased from Germany.
D) decreasing the price of hotel rooms in Germany to U.S.tourists.
Euro
The common currency in most of Western Europe.
Dollar
The official currency of the United States, also used as a standard monetary unit in many other countries.
- Understand the implications of changes in exchange rates on international trade dynamics.
Verified Answer
KY
Katerina YanushefskiMay 01, 2024
Final Answer :
B
Explanation :
A reduction in the price of the dollar in terms of the euro means that the euro is becoming relatively more expensive compared to the dollar. This makes US products relatively cheaper in Germany leading to an increase in the demand for US products exported to Germany.
Learning Objectives
- Understand the implications of changes in exchange rates on international trade dynamics.