Asked by Jaime Andres on Jul 25, 2024
Verified
If one dollar is initially equal in value to one euro and demand for euros increases,then each dollar will be worth:
A) more than one euro and European imports will be cheaper in the United States.
B) less than one euro and European imports will be more expensive in the United States.
C) more than one euro and European imports will be more expensive in the United States.
D) less than one euro and European imports will be cheaper in the United States.
E) the same as the euro and there will be no change in the values of imports or exports.
Euro
The official currency of 19 out of the 27 European Union countries, which is used as a common legal tender for transactions within this zone.
- Understand the concept of foreign exchange rates and their consequences for global commerce.
Verified Answer
HK
Hardeep KharoudJul 25, 2024
Final Answer :
B
Explanation :
When demand for euros increases, the value of the euro rises relative to the dollar. This means each dollar is worth less than one euro, making European imports more expensive in the United States.
Learning Objectives
- Understand the concept of foreign exchange rates and their consequences for global commerce.